It is very difficult to protect your business in a divorce if you do not have any legal measures in place before the proceedings. As a business owner, you have to plan for any possibility no matter how unlikely it is. So, if you get married, you need to understand that divorce becomes part of your possible future and plan for it.
There are a few different things you can do to protect your business before you marry. According to the National Federation in Independent Business, the most common thing to do is to create a prenuptial agreement that outlines the business as personal property that is not divisible in a divorce. However, if you are already heading down the aisle and do not see a prenup as a viable option, you have other things you can do.
Manage carefully
If you owned the business before your marriage, then you can keep it as separate property by carefully managing it. You need to ensure that you do not mix the business with your personal life. Do not put assets or loans for the business in your spouse’s name. Avoid using personal accounts for business needs and visa versa. Also, pay yourself a proper salary so that you do not mix the business income with your personal income.
Use the right business structure
You can often provide extra protection for your business if you operate as an LLC, corporation or partnership. When you have these types of business structures, they include documents and legal protection to help with the ownership of the business in the event of a divorce.
These are only two options that you can try to help protect your business in the event of a divorce. The important thing is that you put protection in place early to avoid any chance of a court determining the business is marital property.
