How Will Divorce Impact My Business?
If you are the owner of a business (or several businesses) and thinking about divorce, you may be wondering how it would affect your business. Will your spouse end up with a portion of the business? Will they end up with the whole business? We address all of these concerns and more below!
How Divorce Can Affect a Business
If you didn’t establish your business until after you got married or didn’t create a prenuptial agreement to protect a business that was established prior to marriage, all or part of it could be forfeited during divorce proceedings. The state of Florida is governed by the equitable distribution of property law. This means a judge will decide the fairest way to divide community property in a divorce, including a personal business.
Possible outcomes for division of your business include:
- your ex-spouse becoming a partner;
- your ex-spouse owning half of the business; and
- your business being liquidated and you splitting the proceeds with your ex-spouse.
Most courts are reluctant to liquidate a business and will usually avoid it if they can, especially if it’s the family’s main source of income. If you own a business and are considering divorce, our skilled divorce attorney can help you navigate the intricacies of property division to protect you and the best interests of your company.
How You Can Protect Your Business in Advance
There are ways to ensure you make it through a divorce with your business(es) in one piece. Some of them are straightforward and simple, while others require the help of an attorney.
These methods include:
- Prenuptial Agreement: This legal document will ensure your current and/or future business(es) remain separate property if you and your spouse divorce. It must be in writing and it must be signed in the presence of a notary or a witness.
- Postnuptial Agreement: This legal document is similar to a prenuptial agreement, only it is created after a couple is already married. Courts will look at this agreement a little more carefully to ensure neither party was coerced into the agreement.
- Buy-Sell Agreement: This is a legally binding document between co-owners of a business. It is put in place to ensure the business remains intact regardless of what happens with the relationship between the co-owners.
- Ensure your spouse is not working for the business or with you at the business. The more involved your spouse is with the business, the more likely they will want a portion of it.
- Pay yourself a salary instead of reinvesting your earnings back into the business. This will deter your spouse from seeking a large chunk of the business.
- Ensure you are separating personal and professional expenses so your business remains your separate property.
- Create a trust account for only your business, so it won’t be classified as a marital asset if you do this.
Contact Dale L. Bernstein, Chartered Law Office
If you own a business and are currently going through a divorce, reach out to our firm today. Our divorce attorney has over 33 years of legal experience and can help you protect your business assets.
Contact us online or give us a call at (727) 312-1112 for a legal consultation.