While no one enters a marriage with the intent of divorcing later, divorce is a reality for thousands of couples every year. The stakes are even higher for those experiencing divorce as a business owner or substantial shareholder of a business. If you are undergoing a divorce in the Washington, D.C., area or wish to protect your business in the event of a divorce, a little education can go a long way in protecting your professional assets.
Plan for the future even when it seems unnecessary
Preventative measures can play a large role in keeping valuable business equity or assets during a divorce. One option is to enter a prenuptial or postnuptial agreement with your spouse at the start of a marriage. While this may be a sensitive topic for some couples, such an agreement can clearly spell out whether the business is joint marital property and what assets will be divided in the event of a divorce.
Other strategic steps include keeping personal and business finances separate, placing the business in a trust or acquiring a whole-life insurance policy. However, it is important to note that these measures are not fool-proof. It may be helpful to consult a family law attorney for advice specific to your particular case.
In the midst of divorce
If you failed to take preventative measures, there still are options to protect your business. For example, consider offering alternative assets, sell a portion of your business for liquidity or offer to make settlement payments over time. At worst, some instances require selling the business in question.
Seek guidance for protecting a business
In the event of a divorce, seeking qualified legal counsel might be vital for the livelihood of your business. While a divorce is stressful, staying calm and making informed decisions may help prevent the dissolution of your business.