While divorce is, typically, seen as a personal issue, a divorce can affect every aspect of an individual’s life, including the way they run the business. Here’s how a divorce can affect a business and how individuals can protect themselves.
How can a divorce affect a business?
Everything can be called into question during a divorce, even the ownership of a business. In some states, the business is evenly split between both parties during a divorce. In other states, the decision is ultimately left to the judge, but an individual might find themselves losing sole ownership of their business.
Additionally, the stress of getting divorced can make it harder for an individual to ruin their business. If their former spouse is still involved with the business, an individual might find it even harder to manage the day-to-day operations. Conflicts can arise and profits might start to drop.
What steps can people take to protect themselves?
To protect themselves in the event of a divorce, individuals can sign a prenuptial or postnuptial agreement that protects their business assets. They can also keep their business and property assets completely separate so that ownership of the business can’t be contested during the divorce. As a last resort, people can sell their stake in the company or sell the entire business altogether. They can also negotiate with their former spouse and offer to give up other property in exchange for keeping the business.
Where can people go for guidance during a divorce?
Hiring an attorney during a divorce can help people protect themselves, present a strong case to the judge and negotiate for a fair division of assets. The attorney might also be able to help them deal with child custody and visitation disputes. Working with an attorney, business owners might be able to secure ownership of their company and assets.