What Can You Do to Protect Your Florida Business when You Divorce?
April 14, 2021
The age at which Americans are deciding to get married is constantly increasing. Some legal analysts suggest that spouses may be holding off on getting married because they want to focus on their careers early on.
It shouldn’t come as a surprise that individuals who wait to get married often already have significant assets. One of these might be a business. You can take steps to minimize the chances of your spouse staking claim to such a valuable asset should you divorce.
Draft a Prenuptial Agreement
One of the best approaches for protecting your assets in a divorce is to include them in a prenuptial agreement. You can spell out how you came into the marriage with your business and don’t want it to be subject to division in a divorce. The opposite will happen unless you protect your business in your prenup.
Revisit Your Partnership Agreement
You may also want to revisit your partnership agreement to update what it says about ownership rights and transfers if your business partner divorces. You might want to include a clause in it giving one partner the right to buy out the other’s share in the company in the event of a divorce.
You generally need to draft both prenuptial and partnership agreements stating your wishes to keep your business as your own before walking down the aisle. There are other options for protecting a business in a divorce, though. Taking money that you earn and investing it in a startup incorporated in your name might be a way to protect it from your spouse in a divorce. You’ll need to make sure not to comingle any revenue it generates with your personal assets though.
Pay Yourself a Salary
Your spouse may be able to stake a claim to the difference between your company’s value and your salary if you don’t pay yourself a competitive salary. You should also pay your spouse for any work that they perform for your business, as this might minimize the chances of them staking a more significant claim in your company if you divorce.
Dividing high-value assets such as a Florida business can be challenging, especially if you never drafted a prenup. An experienced family law attorney experienced in handling complex cases can advise of options for minimizing your divorce’s impact on your business.