When one party enters a marriage having already built a successful business, it is important to take steps to protect those assets from loss. Should the marriage end in divorce, a spouse who had no part in creating the business could end up with a significant share of business assets, which can lead to financial turmoil for the business owner and even a risk of having to close the doors permanently. Preventing that outcome should be a top priority for Maryland business owners who are preparing to wed.
Of course, the most powerful means of shielding business assets from loss is to create a prenuptial agreement that specifically addresses the issue. A solid prenup can work wonders in protecting one’s interests, especially in cases where the business was already up and running prior to the marriage, and where the other spouse does not play a role in running or enhancing the business. If a prenup is not possible, then the next best course of action is to meet with a divorce attorney to make a plan. In some cases, it is possible to create a legal argument that shows that the business has always been the sole responsibility of the owner, and that the other spouse was not active in furthering the company. That can help limit the share of assets that the spouse can attain if the matter goes to court.
One of the most important ways of supporting such an argument is to maintain good records. Being able to show that business funds were always kept separate from marital funds can help. Another good practice is to make sure that the owner is paid a salary from the business, which can help to establish the operating budget of the company.
When preparing for a divorce where a prenup is not in place, having a solid game plan is always advisable. It may not be possible to completely shield all business assets from loss during a Maryland divorce, but it can be possible to limit the damage that will be done. That could be sufficient to allow the business owner to emerge in a good financial position and work toward toward future success.
Source: The Huffington Post, “Essential Steps To Divorce-Proof Your Business“, Lisa Helfend Meyer, June 29, 2016