How to Save Your Business During a Divorce
When getting married, the last thing you’re going to be thinking about is the possibility of a divorce. That’s one of the biggest reasons people neglect signing pre-nuptial agreements.
Unfortunately, divorces happen, and facing a divorce is probably one of the most emotionally difficult experiences for everyone involved. Not only are the emotions running high, but if you’re the owner of a business, your business may be threatened, too.
As an entrepreneur, protecting your livelihood during a divorce is just another thing you can add to the list of the things to worry about.
Here are some helpful tips on how to protect your business during a divorce.
1. Remove your ex from business involvement
In case your soon-to-be ex-spouse is involved in the business, it’s time to fire them. This may sound harsh, but removing them from any business involvement will help you impede your ex from seeking a share of profits from your business.
To avoid any conflicts and to amicably go through your divorce, this is the best possible move you can make – remove your spouse from the business, regardless of how big or small their roll was.
2. Neutral valuation by a professional
Protecting your business during the divorce means hiring a professional who will do a neutral valuation of your business. This step can be very useful because it will determine how much your business is worth and how it will be impacted by the divorce settlement.
This valuation professional is usually appointed by the court, but no one is stopping you from hiring another neutral third party to double-check the accuracy of the valuation.
After valuation has been done you will know exactly how much money you have to pay your ex to buy out their shares in the company (in case they had any).
3. Keep your business and family accounts separate
This should go without saying, but just to be sure – always keep your family and business accounts separate! Not only will the valuation of the business be easier but also you won’t have any trouble keeping track of all your finances.
Having separate accounts will also make things easy during a divorce. If this is something you haven’t been doing properly, it’s high time you started.
4. Hire an accountant
Hiring an accountant can help you keep the above-mentioned accounts separate. If up until now you didn’t have an accountant, it’s probably a good time to hire one. Keeping finances in order can be a challenging feat, especially during a divorce.
Having someone to help you out, manage accounts, keep track of bills and receipts, taxes, and other financial information can be a huge relief.
So, do yourself and your business a favor and hire a good accountant.
5. Hire lawyers
Another thing you need to consider is hiring trustworthy family lawyers, as well as business lawyers. Family lawyers can help you deal with the divorce and give you divorce advice. Hopefully, it doesn’t get to the point where the divorce turns into something ugly but having someone with experience advise you can help a lot.
Business lawyers, on the other hand, can help you keep your business safe. So, hiring either of these lawyers can help a lot during the divorce process, but if you can, be sure to hire both professionals.
6. Give up other assets in exchange for your business
Most of the assets during a divorce won’t be divided 50/50 between the couple, however, be prepared to make some compromises. To keep your business from being taken from you consider giving up other assets in exchange for it.
These other assets may include vehicles, properties, family heirlooms, and even retirement accounts whatever your ex asks of you, just try to keep your most valuable financial asset.
7. Protect yourself on time
Joint accounts and credit cards linked to your business should be separated on time. Maybe you’re late for a prenup but you can still make a post-nuptial agreement.
A postnup is similar to a prenup but it’s signed after you’re married. A postnup has only become common in recent years, and it spells out how assets will be divided in the event of a divorce.
While a postnup can help you protect your business and inheritance, for example, it can’t address the issues around child custody or support.
Another way to protect your business on time is with a buy-sell agreement. It’s good to know that in the event of a divorce, this agreement can help you protect your business.
8. Keep all the records right
When it comes to your livelihood, keeping a good record of everything is a good idea. All conversations, agreements, correspondence – you should keep a record of. Unfortunately, you never know when things may go south, and having hard proof can help you save your business.
Also Read: Business Benefits of Cannabis Farming
Divorces can put everyone in a difficult situation, especially if you own a business. There’s a lot that can happen during a divorce, from getting your ex as a business partner to completely losing what you worked hard to create.
So, don’t feel guilty for worrying about your business during such an emotionally difficult time in your life. After all, you have put a lot of effort and time into making that business successful. Of course, you wouldn’t want it to end up in the wrong hands.
