When you and your spouse got married, you probably thought your marriage would last forever. Unfortunately, this is not always the case. You might have to worry one day about how the two of you are going to divide your valuable marital assets, including your house in Nashville, vacation homes, cars and other assets. Furthermore, you will have to make decisions regarding what to do with your business.
After all the long hours and assets you have put into making your business successful, the last thing you want to see is all of your hard work falling apart because of a divorce. The following strategies can help you protect your business during divorce.
Draft marital agreements.
One of the early steps you can take to protect your company is to draft a marital agreement. If you do not already have a prenuptial agreement in place, you should consider a post-nuptial agreement. In general, a post-nuptial marital agreement will work like prenup in that it addresses how you will handle property division in a divorce. As long as the court views the martial agreement as valid, it might even supersede Tennessee’s property division laws.
Define roles involving the business clearly.
During the division of marital assets, one way a business is often evaluated by the Courts involves the amount of time and financial resources each spouse has invested. This could involve hours put in working for the business or money invested in order to keep a positive cash flow and be able to pay ongoing bills and payroll expenses. If one spouse answers the phones or does the bookkeeping for the business, for example, this could be considered in any valuation of the business for division of assets in divorce. Having clearly defined roles for each spouse can help a judge in separating the ownership interests should this ever need to be considered for a divorce.
Offer to buy out your spouse.
If your spouse was heavily involved in building and operating your business, you might be able to buy out your spouse in order to save your business. A buy out could include giving up an equivalent amount of other marital assets or possibly paying him or her in cash. He or she may be also willing to accept an installment plan where you make monthly payments for their share of the company.
If you are a business owner and considering divorce, the above tips might help you save your company in the event of a divorce. There are additional things you can do to protect your other property from divorce and prepare yourself for a fresh start once you finalize your divorce. Seek advice from a qualified attorney about steps you can take to protect your important assets.