When a California couple marries, they probably aren’t thinking about the possibility of what will happen if the marriage ends at some point in the future. While no one wants to assume that divorce is inevitable, it is still important to prepare for the possibility. This is especially crucial for those who own businesses and other closely held assets they would want to protect and preserve.
Business owners can face unique challenges in a divorce regarding their company assets. The division of marital property can be quite complex when there are disputes over how to divide the business assets fairly or if they even qualify as marital assets. If you own a business, know how to protect your interests before you marry or even after the wedding.
What can you do?
One way that a business owner can protect his or her interests is by drafting a prenuptial or postnuptial agreement. These contracts can specify what assets are separate, such as previously owned business assets, making the property division process smoother. Through the terms of these contracts, it is possible to also limit a spouse’s share of a business’ increased value that occurred during the marriage. It is possible to custom-tailor the terms of these agreements to suit your unique needs and objectives.
Outside of drafting a marital contract, you may want to establish yourself as the sole owner of the business and put all of your business assets in your name alone. If you start a business after marriage, you can include in the organizational documents that the business is not transferrable in a divorce. Keeping clear records is crucial as is keeping business and personal expenses separate. It is also prudent to pay yourself a fair salary that is not exorbitantly over market value.
Complex property division help
Even with these preparations, a divorce can result in complex property division disputes. It may be necessary to take your disputes to court if a negotiated agreement does not appear possible. Litigation may be the only way to fight for your business, but you do not have to fight alone.
A divorce has the potential to bring significant financial changes to your life. If you are facing a complicated legal dispute over the division of marital assets, it is in your interests to work with a legal ally who can help you fight for your business. You have the right to protect what you worked so hard to build.