Protecting The Business In The Event Of A Divorce
A breakup is always a personally hard thing to deal with. However, when there are major assets involved, such as a business, it can also become a financial hardship, too. If you’re not careful, it can put the business in real jeopardy. Here, we’re going to look at some of the ways that you can protect your business if you’re worried about how a divorce might affect it.
Get your spouse uninvolved with business ASAP
If you think that divorce might be in the cards or you simply want to make sure that your business is protected, no matter what happens, then you should not work with your spouse. The more involved they are in the business (or the more they can allege their involvement,) the more likely that any court is to see they are entitled to the profits and assets of that business.
Make sure your business and personal finances are separate
It’s always an effective tip for every aspect of protecting both your personal and business finances. If your business is not already a limited liability company, you might want to turn it into one with the help of sites like LLC University. Otherwise, make sure that your business finances are kept in entirely different accounts, managed separately, and tracked carefully away from your personal finances. If you’re thought to be “starving” your personal finances for the sake of the business, this can also be used to show that your spouse should be receiving more but you’re withholding it to keep it in the business, so paying yourself a healthy salary is crucial.
Work with representation early
As soon as you think divorce proceedings are coming, or if you’re planning to launch them yourself, stop taking any independent action to protect your finances. It’s easy to make mistakes (like trying to put money from joint accounts into private accounts) that can then be used to show that you’re not willing to go through the divorce by the right legal channels. Get in touch with a team like Spodek Law Group. They will be able to inform you as to the best ways to protect your assets, including those that need a higher priority level of protection, like the business.
Ensure a fair division of assets
One of the ways that you can better protect some of your assets is to intentionally give away a larger share of some of the others. You can effectively pay your spouse off, giving them a larger share of other assets, such as giving them some property that you own, or a larger share of your personal cash. If your spouse is likely to be entitled to a larger share of your assets (which your lawyer will be able to advise you on) then you make sure that they get the share they’re likely to get in other ways.
The best way to protect your business during a divorce is to organize it away from family finances as early as possible. Beyond that, working with legal counsel as soon as possible really is your best bet.