Guarding Your Business Assets During a Divorce
While divorce is never easy, your separation can become that much more complicated if your marital property and business assets overlap. Since many people devote their lives to seeing their business grow and flourish, learning that its control or even existence may be compromised as a result of your separation from your spouse can be a crushing blow. Fortunately, regardless of whether your business began before or during the course of your marriage, there are several ways that can protect your business assets from being torn apart during your divorce.
- Prenuptial and postnuptial agreements: Prenups and postnups are a lot like fire extinguishers – you hope to never use them, but will be glad to have them if you do. While creating a prenup may not be the most romantic way to start your life with your spouse, these agreements can allow you to determine which parts of your business, if any, will be considered marital property and what will be separate.
- Incorporate as an LLC, trust, or corporation: Even if you own your business as a sole proprietor, you can protect its assets by holding it within a separate legal entity such as an LLC, corporation, or a living trust. With that being said, using marital assets to pay company expenses or commingling assets in some other fashion can nullify this benefit and cause the courts to determine that your company is marital property. Likewise, while business assets shielded within a living trust may be protected from being surrendered your spouse, they may still be considered when calculating alimony payments.
- Buy out your spouse: If your spouse’s ownership interest cannot be disputed, you may be able to negotiate a formal purchase of that interest from them. Be sure to memorialize this transaction in a clearly worded contract which delineates exactly which ownership rights are being surrendered and what is being exchanged for said rights.
- Maintain a good relationship with your ex: Since it may not be possible to in all situations to cleanly remove your ex from your small business, particularly if both of you share an ownership interest, the best course of action to foster its success is often to maintain a healthy business relationship with them. Staying honest and civil with your ex during divorce proceedings regarding your business interests can do wonders to help you achieve a mutually acceptable solution.
Discuss Your Options with Hedayati Law Group, P.C.
No divorce is simple – and it is not something you should attempt to go through alone. At Hedayati Law Group, P.C., our award-winning Long Island divorce lawyers can provide the strong legal guidance you need to ensure your best interests are guarded. With more than 80 years of combined experience handling both complex family law and business cases, our team of advocates is prepared to listen to your needs and guide you towards the smoothest resolution possible for your situation.
Call (631) 880-6440 or fill out an online form today to schedule your complimentary case review.