Few people go into a marriage with the belief it will end in divorce. However, this is a likelihood for many couples in Boulder, and business owners must take the proper steps to protect their assets. Forbes explains a few ways you can safeguard your business in a way that is reasonable to all involved.
While it is common for finances to become intertwined during the course of a marriage, combined finances make the asset division process quite complex for people that own businesses. It also provides your spouse more leverage when asserting that he or she contributed financially to the success of the enterprise. In the same token, make sure records detailing the business capital are well organized. This will make the division and valuation process much easier.
You should also make it clear that you are the sole owner of the business from the outset. Part of this entails including language that stipulates the business will not automatically be passed along to your spouse should a divorce occur. Of course, there are contractual methods of securing your business when entering into a marriage, including pre and postnuptial agreements.
Both documents specify who owns what before the marriage takes place, which is beneficial to divvying up property and assets during a divorce. Along with delineating property ownership, and these agreements can also be used to determine how much your ex-spouse will receive when it comes to profits your business made after you were married. Unlike other assets, which are usually split according to the distribution laws in your state, you can use marital agreements to stipulate what percentage of business earnings your spouse will receive. Because pre and postnuptial agreements can be complex, it is recommended that you seek the services of an experienced attorney when creating these documents.