{"id":2645,"date":"2019-04-03T04:31:19","date_gmt":"2019-04-03T08:31:19","guid":{"rendered":"http:\/\/www.atyourbusiness.com\/blog\/?p=2645"},"modified":"2019-04-03T04:31:43","modified_gmt":"2019-04-03T08:31:43","slug":"divorce-with-a-business-involved-how-to-keep-your-business-protected","status":"publish","type":"post","link":"https:\/\/www.atyourbusiness.com\/blog\/divorce-with-a-business-involved-how-to-keep-your-business-protected\/","title":{"rendered":"Divorce with a Business Involved: How to Keep Your Business Protected"},"content":{"rendered":"\n

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Divorce is never easy and almost always brings major financial consequences. In the aftermath of a divorce, most men will suffer a 10 to 40 percent drop<\/a> in their standard of living, and one in five women will end up living below the poverty line. When facing a divorce with a business involved, the stakes get even higher.<\/p>\n\n\n\n

Fortunately, there are some steps you can take now to ensure that dividing a business in a divorce happens fairly and equitably. Here\u2019s what you need to know.  <\/p>\n\n\n\n\n\n

Proactively Preparing for Divorce with a Business Involved<\/h2>\n\n\n\n

Although nobody wants to think about getting divorced, proactively preparing your business before you have problems is one of the smartest things you can do. Start with these four simple steps.<\/p>\n\n\n\n

1. Sign a Prenup or Early Postnup<\/h3>\n\n\n\n

If you owned your business before you got married, a signed prenuptial agreement designates it as an asset that\u2019s separate from your marital assets. Although a judge will often be skeptical of a postnuptial agreement, it might hold some weight if it\u2019s been in place for at least seven years since your divorce.<\/p>\n\n\n\n

2. Set up a Buy-Sell Agreement<\/h3>\n\n\n\n

A buy-sell agreement describes exactly what will happen if there\u2019s any change in the ownership of the business. This is particularly important in cases when a company is organized as a .  Having a buy-sell agreement in place during a divorce can limit your spouse\u2019s ability to take over ownership and might give you or your partner the right to purchase the business at a low pre-set price.  <\/p>\n\n\n\n

3. Purchase a Whole Life Insurance Policy<\/h3>\n\n\n\n

Whole life insurance policies build up cash value. If you need to buy out your spouse’s share of the business, this policy can be a good source of funds. <\/p>\n\n\n\n

Protecting Your Business During the Divorce Process<\/h2>\n\n\n\n

If you\u2019re already talking about filing for divorce<\/a>, it\u2019s likely too late for proactive measures. Here are a few things you can do to keep the business together during the divorce process.<\/p>\n\n\n\n

1. Separate Your Business Assets (and Keep Good Records)<\/h3>\n\n\n\n

To avoid any further confusion, don\u2019t use any personal assets to fund your business expenses. For example, avoid pulling money out of your family\u2019s savings to buy a company work truck. Make sure you\u2019re taking a fair salary and leave any extra business revenues in your business account.<\/p>\n\n\n\n

2. Get a Fair Valuation<\/h3>\n\n\n\n

When it comes to separating assets, business valuation matters. Make sure this is done by a neutral, court-ordered professional. If you don\u2019t agree with the valuation, you can also get a second opinion before you agree to it.  <\/p>\n\n\n\n

3. Prepare to Sacrifice Other Assets<\/h3>\n\n\n\n

Often, your ex-spouse will find the value of the business more appealing than actually owning it. You\u2019ll have a better chance of retaining 100 percent ownership of your business if you\u2019re willing to give up other assets like cash and retirement accounts.<\/p>\n\n\n\n

Get Your Business Back on Track After a Divorce<\/h2>\n\n\n\n

Successful business owners are always looking for ways to improve their business and sharpen their skills. After you survive divorce with a business involved, you\u2019ll likely have to work even harder to get things back on track.<\/p>\n\n\n\n

Stay on top of the best business-building tips by bookmarking our . New posts are added all the time, so make sure you check back often!<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Divorce is never easy and almost always brings major financial consequences. In the aftermath of a divorce, most men will suffer a 10 to 40 percent drop in their standard of living, and one in five women will end up living below the poverty line. When facing a divorce with a business involved, the stakes […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17],"tags":[],"_links":{"self":[{"href":"https:\/\/www.atyourbusiness.com\/blog\/wp-json\/wp\/v2\/posts\/2645"}],"collection":[{"href":"https:\/\/www.atyourbusiness.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.atyourbusiness.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.atyourbusiness.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.atyourbusiness.com\/blog\/wp-json\/wp\/v2\/comments?post=2645"}],"version-history":[{"count":1,"href":"https:\/\/www.atyourbusiness.com\/blog\/wp-json\/wp\/v2\/posts\/2645\/revisions"}],"predecessor-version":[{"id":2647,"href":"https:\/\/www.atyourbusiness.com\/blog\/wp-json\/wp\/v2\/posts\/2645\/revisions\/2647"}],"wp:attachment":[{"href":"https:\/\/www.atyourbusiness.com\/blog\/wp-json\/wp\/v2\/media?parent=2645"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.atyourbusiness.com\/blog\/wp-json\/wp\/v2\/categories?post=2645"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.atyourbusiness.com\/blog\/wp-json\/wp\/v2\/tags?post=2645"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}