Divorce can be emotionally and financially challenging, especially if you are a business owner. You may be worried about the need to sell your business during property division or losing control of the company you built. Careful planning, though, may allow you to protect your business from your divorce.
1. Have a prenuptial or postnuptial agreement in place.
It can help be helpful to discuss your expectations with your spouse, and by laying out those expectations in a legal document you can protect your business for the future. Whether you choose to use that agreement to establish that your business is separate property or to discuss what rights your spouse will have to the business, this agreement can make property division less stressful if your marriage ends.
As Forbes notes, this can be especially important if you and your spouse have built your business on an equal partnership. If you cannot continue that partnership after the end of your marriage, a prenuptial or postnuptial agreement allows you to detail who will buy the other person’s share of the business
2. Keep your personal funds out of your business expenses.
In Ohio, property is divided equitably but not necessarily equally. This means that the goal is to divide your marital property fairly. If you use marital property—assets acquired during your marriage and owned jointly, like a joint bank account—to pay for expenses in your business, it may be considered marital property as a result.
3. Keep in mind that you may need to negotiate if you get a divorce.
If your business is considered marital property, you may need to make sacrifices to become its sole owner in the future. This could involve allowing your spouse to take ownership of other high-value assets like the family home in exchange for the business, or it could involve buying out your spouse in the future.
With care, you can protect your business from divorce and continue building your company after the end of your marriage.
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