No one ever expects their marriage to end in divorce in Connecticut, but it happens. If you are a small business owner, you need to take steps to protect your business should your marriage end in divorce.
Create a prenuptial agreement
A prenuptial agreement is a contract between you and your spouse that outlines what will happen to your assets in the event of a divorce. This can include your business, savings, investments and property. If you don’t have a prenuptial agreement, your state’s laws will determine how your assets are divided in the event of a divorce. This could mean that your spouse ends up with half of your business.
Get a business valuation
If you don’t have a prenuptial agreement, you will need to get your business valued in the event of a divorce. This will help determine how much your business is worth and how it should be divided between you and your spouse.
Create a family partnership
If you have children, you may want to consider creating a family partnership per family law guidelines. This will ensure that your children will inherit a stake in your business and can continue running it should something happen to you.
Separate your personal and business finances
It is important to keep your personal and business finances separate. This will make it easier to track your expenses and income, and it will be less complicated if you ever have to go through a divorce.
Limit access to company information
You need to limit access to company information. Be sure to keep important documents and records locked up and only give key employees access to them. This will help prevent your spouse from having access to sensitive information and make it more difficult for them to take over your business in the event of a divorce.
Add the business to a trust
A trust is a legal entity that can hold assets on behalf of another person. You can use it to protect your business from divorce. By adding your business to a trust, you can ensure that it will go to your children or other family members in the event of your death or divorce.
Divorce often comes with devastating consequences, both emotionally and financially. If you are a small business owner, you need to take steps to protect your business should your marriage end in divorce.