While marriage is a lifelong commitment, it’s always wise to plan for the possibility of things not working as you may have hoped. Some couples fail to prepare for the possibility of divorce, which can lead to severe consequences. Divorces can be extremely challenging to navigate, especially when business assets are involved. Having their enterprise on the line can be devastating for many business owners. Entrepreneurs do not put their time, energy, and money into building and making their business successful to face the potential of losing a portion of it during property division in a divorce. Therefore, taking the necessary precautions to ensure your business assets are safeguarded in case of a divorce is crucial. If a divorce is imminent, contact our dedicated Monmouth County Division of Assets Attorneys, who can help you protect your hard-earned assets.
What are some different ways to protect my business from the impact of a divorce?
As an entrepreneur, taking the necessary steps to preserve your business is vital. If you do not want to end up being in a business partnership with your ex-spouse or have to give up half of the business during equitable distribution, you must consider the following options:
- Create a trust. To best protect your business during a divorce, you should consider placing it in a trust. This will keep it from being subject to equitable distribution. If business assets are in a trust, they are considered separate rather than marital property. However, it’s imperative to note that you should use marital assets for business expenses as they will be regarded as commingled assets. Nevertheless, forming a separate business entity, such as an LLC or corporation, creates a separate entity that owns the business assets, keeping it out of the property division.
- Create a buy-sell agreement. As mentioned above, your spouse may be entitled to a portion of your business if it is considered marital property. A buy-sell agreement can help you prevent them from retaining part ownership. This legal document allows you to stipulate what happens to your property share of your business that your spouse might otherwise claim. Essentially, you can define how you will calculate the value of your spouse’s share of the business if you dissolve the marriage. Therefore, you will have control over the sale of your business rather than leaving it up to the judge to decide.
Fortunately, there are several ways that you can protect your business assets during a divorce. If you own a business and you’re considering a divorce, please don’t hesitate to contact an experienced Monmouth County divorce attorney from the legal team at Peone Zaleski & Murphy, who can guide you through this complex legal process and fight for your rights.