You’ve invested endless energy and money into your business, and now you fear that your spouse will take your life’s work away from you. Whether you own your business independently or jointly with your spouse, now that you have made the decision to divorce, you need to take steps to protect your business.
The divorce of a business owner can lead to uncertainty and instability in a business. For businesses owned by married couples, divorce can be destructive to the business if both spouses are vital to its operation and can no longer work together. However, even the non-owner spouse of a business owner may have rights in a divorce that can be damaging to the business.
Many business owners have no plan in place for their business in the event of a divorce. Planning ahead of time by having a prenuptial agreement is the best way to avoid uncertainty in the event of divorce.
However, even if you have no prenuptial agreement, there still are steps you can take to protect your business:
Obtain a favorable valuation: Arrange for a business valuation on your own. Valuations often vary widely, so you should find one that favors you.
Reduce your spouse’s role: If your spouse is working for the business, take steps to reduce their role and make their efforts seem unimportant to the business.
Pay yourself a competitive salary: Business owners often take a reduced salary in order to grow the business. If a divorce is imminent, this will cause the value of the business to seem higher and therefore your spouse’s share will be higher.
Employ creative methods to pay off your spouse’s share: You may be able to keep the entire business if you are willing to give up other assets like retirement accounts and the family home. If you need to buy out your spouse’s share of the business, you could arrange for monthly payments over time from the business’s profit or from a bank loan.
Consulting an experienced Missouri divorce attorney will help you protect your business through even the most difficult of divorces.