As an entrepreneur, you have a lot of things to consider when starting your company. The business formation process requires you to factor in a lot of variables to ensure the future of your entity is successful and stable. One important consideration is how the business will affect-and be affected by-your marriage.
A future divorce may mean calamity for your business if you do not plan carefully. Without advance preparations, you may see your business divide into pieces or lose it in a sale. Here are some possible proactive steps to take to help protect your company from a potential divorce.
1. Get a prenuptial agreement
According to The Business Journals, one of the most effective ways to safeguard your business from divorce is getting a family law attorney to draft a prenup for you. A prenup can include clear language saying that your business is separate property, so it is not subject to division during divorce. If you already have a spouse, you can sign a postnup instead.
2. Separate your finances
Generally it is best to avoid letting your business finances intermingle with your personal finances. If there is a clear dividing line between your business and personal finances, things could be a lot simpler during a divorce.
3. Do not involve your spouse
If your spouse works with you, he or she may have an easier time getting a substantial cut of the business in a divorce settlement. One way to potentially mitigate this risk by keeping your spouse from working in your company.
Running a business and managing a marriage are both complex enough on their own, and when they are mixed together, things can become even more complicated. However, there are measures you can take towards preserving your business if your marriage ever ends. The end of your marriage does not need to be the end of your business.