Thousands of marriages in Florida end in divorce every year. Divorce always has financial implications, and for the owner of a business, these can be severe. But there are steps that you can take to ensure that your business survives and is in good hands if you end up divorcing your partner.
Proactive measures
The best solution is often the proactive one, and it’s true in this case. The surest way to safeguard your business is through a prenuptial agreement.
In a standard divorce where no prenup is present, a spouse may be entitled to up to 50% of a business, which may result in the court enforcing their partnership in the business or requiring one ex-spouse to buy the other out. This can spell the end of that business.
But with a prenuptial agreement, you can specify what percentage of the business is considered joint property. By doing so, you can create an arrangement that takes care of both partners but leaves the business intact in the event that your marriage ends.
Solutions if you’re already married
A prenup might be an ideal solution, but it’s not useful if you’re already married. But there are still ways to protect your business.
One way to safeguard your business is through a trust. A trust allows you to protect assets from creditors, which includes someone you’re divorcing. Setting up a trust can shelter your business not just from a divorce but from other adverse events leading to lawsuits.
A lesser-known cousin to the prenuptial agreement is a postnuptial agreement. It works similarly to a prenup but is created during an existing marriage. This can often be a good option if you decide to establish a business after getting married.
Divorce can often wreak havoc on the couple’s finances, and a business can suffer greatly as a result. But you have legal means at your disposal to safeguard your business in the event of a divorce.