Divorcing? Protect your company’s ownership
On behalf of Johnson, Sclafani & Moriarty, Attorneys at Law posted in High Asset Divorce on Friday, March 10, 2017.
Do you consider yourself a savvy businessman or -woman? If so, you value the process of planning when making important decisions that affect your company and its bottom line.
The same attention to detail should carry over in your divorce settlement. You’ll want to ensure that your business is secure and not subject to being sold or split between you and your spouse. So what’s the best way to divorce-proof your business?
Ideally, you will have a solid prenup in place with absolutely no wiggle room regarding ownership of your business interests. But far too many business owners get married without prenuptial agreements in place.
Post-nuptial agreements can be useful documents in such scenarios, but the court might look askance at a postnup that was drawn up shortly before a divorce filing.
Incentivize your ex with appealing settlement properties or sums of money in lieu of corporate assets or interests. Sometimes a series of payments can be made rather than having to come up with a lump sum on short demand.
Wise entrepreneurs are meticulous about never commingling business and marital assets, which can open the door to claims for shares of the company. This doesn’t mean that both spouses’ names can’t be on mortgages or financial accounts. It simply delineates clearly which assets belong to the spouse involved with the business (think company vehicles, business loans, etc.) and which are part of the marital community.
It behooves some business owners to periodically review and update pre- and postnups to reflect changes in circumstances, like the birth of children.
When a business is co-owned by both spouses, it becomes more complex to retain ownership of the company. A good way to do so is to include a thorough buy-sell agreement, just as with any business partnerships.
Your family law attorney can strategize ways to protect your biggest asset — your company.
Source: Inc.com, “Divorce-Proofing Your Company,” Jill Andresky Fraser, accessed March 10, 2017
