Filing for divorce can be an exceptionally emotional and complex process for small business owners. With the unpredictable nature of the divorce process and the need to divide marital assets there can be real concerns that a family-owned business will be lost in a divorce. Fortunately, this does not have to be the case. Minnesota couples with family-owned businesses may find the following divorce blog interesting.
It is important that high asset couples as well as small family owned business owners plan carefully when considering marriage. While no one wants to think divorce will happen, the fact is about 50 percent of all marriages in the U.S. fail. And, because a privately held business can account for a significant portion of the marital estate subject to division, it is imperative to plan carefully to protect these assets in a divorce.
One of the most notable ways to protect a business in the divorce process is with a prenuptial agreement. A prenuptial agreement is a great way for couples to clarify what will occur with important assets such as real estate, stock holdings and important business assets in case a divorce should occur. For those who fail to prepare a prenuptial agreement before getting married, another option is a postnuptial agreement.
While a prenuptial agreement is probably one of the best options available for married couples seeking to protect a family-owned business, there are other options to consider as well. For instance, it is a good idea for business owners to prepare a partnership agreement or shareholder agreement to protect the business against any claims made on the business by a spouse in a divorce. These, however, are just a few options.
Source: Nashville Business Journal, "How to divorce-proof your business," Rosemary Frank, Feb. 19, 2014
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