Starting a business is a long and complex process that is rewarding when you achieve success. One in two marriages fails in the U.S., which can have a serious impact on business owners. Protecting your assets when you go through a divorce can be difficult. Using a prenup or postnup is the safest option for protecting your assets.
Marital property and divorce
Divorce is a messy business, with conflict a natural part of the process. No matter how amicable your divorce is, you will face the potential for claims on your business. Divorce law includes the right of both parties to any assets accrued during the marriage. In some states, a 50/50 split is guaranteed for both spouses in a divorce.
Running your business each day
Going through a divorce is a distressing time for everyone involved. Questions of child custody and financial obligations make it difficult for those involved to live a normal life. The day-to-day running of your business will suffer if you do not protect yourself from losing your assets. If your spouse has helped build the business in an important role the divorce will become even more difficult to complete amicably.
Create a contract
A prenuptial agreement is the safest way to protect your business during a divorce. Separating from your spouse can be done without a prenup if you can agree before heading to court. A postnup can be drawn up that gives your spouse a monetary sum to protect you from losing any of your business assets. Arriving before a judge with a plan in place will raise your chances of avoiding losing your business to your ex-partner.
Waiting to protect your business until you are going through the divorce process is not a good idea. Drawing up paperwork to protect your business will pay off if divorce happens.