Entrepreneurs work hard to get their business up and running. For those who find success, a number of steps can be taken to help better ensure their business interests are protected from various threats. Litigation resulting from an injury or contract issue are two examples, but business owners should also take steps to shelter their business interests from divorce.
Before the marriage: Steps to protect business
Ideally, steps are taken prior to walking down the aisle to shelter business interests. As noted in a piece published in Forbes, these steps provide a type of insurance for the business. Two examples that can help to protect the business include use of a prenuptial agreement and trusts.
A prenuptial agreement can outline what happens to assets, like business interests, in the event of a divorce. Trusts are legal tools that can help further shelter the business by keeping it completely separate. These steps can essentially remove the prospect of splitting business interests between the couple during a divorce.
Impending divorce: Tips for sheltering the business
The property division determination portion of a divorce is often one of the more contentious parts of the process. As noted in a piece in Entrepeneur, a wise negotiation strategy can help when attempting to protect a business. Three tips include:
- Candor. Do not attempt to hide the business asset or any other asset.
- Value. If the business is considered marital property, get an accurate valuation.
- Sacrifice. Be prepared to sacrifice other assets. Generally, property divisions often aim to be fairly even. Consider another asset that has a similar value to the business as a negotiation tool if needed.
Business owners can benefit from keeping the future in mind. It is wise to seek legal counsel to discuss options that will best protect your specific interests, as the best option will vary depending on the details of the situation.