Building a small business take a lot of time, money and personal sacrifice. Because of this, it can be especially devastating if a divorce destroys the business. Fortunately, there are several steps that a small business owner can take to protect their investment. However, it is essential to think ahead to provide yourself with the best possible advantage. After all, if you allow yourself to believe that nothing will happen to your business during the divorce proceedings, you are most likely going to end up with a very unwelcome surprise.
image src: flickr
Tips for Preserving Your Small Business During a Divorce
1) Use Your Business as a Bargaining Chip
During a divorce, it is common for the ex-couple to disagree about the way that their belongings will be divided. Because of this, you can actually use your small business to your advantage. For example, if your ex appears desperate to get certain things during the settlement, you can offer them in exchange for leaving the business alone. This might require you to lose things that mean something to you, but it is a good strategy for business owners who are afraid that their company will be ruined as a result of the divorce.
2) Work with an Experienced Divorce Attorney
Your lawyer is going to have a big impact on the divorce settlement. After all, if an attorney makes a mistake, it could cost you a lot of money. Therefore, you should look for an attorney who has a proven track record of helping their clients get a fair settlement. Look for a recommendation among your trusted friends, or you can do a search engine inquiry pertinent to your area and look for reviews online. Look for a local one by inputting keywords for your search. For example, if you live in central Florida, then input "divorce attorneys around Orlando Florida" to get a list of attorneys that you can research from that area. You want to look for one that is knowledgeable about divorce law.
3) Utilize a Prenuptial Agreement
Although it might not be romantic, a prenuptial agreement is the best way to protect your assets if your marriage ends in divorce. Sadly, most small business owners fail to use this option, and it can ruin their company. If you are fortunate enough to make it through your divorce without losing your business, you should definitely consider a prenuptial agreement if you ever decide to get married again.
4) Operate Your Business as a Partnership, LLC or Shareholder
If you have other people involved in your business, it will be possible to draw up legal papers that make it impossible for your ex-spouse to ruin your company. As an added bonus, you can even make a prenuptial agreement a requirement for anyone involved with the company who gets married. This will make it easier to introduce the idea of signing one of these agreements since you will be legally bound to comply with this business clause.
In some cases, it is best to offer larger child support payments or a single lump sum settlement check to keep your ex away from your business. Either way, your lawyer will help you determine the best course of action. As long as you take a proactive approach, it is definitely possible to retain 100 percent of your small business after the divorce becomes final.
About author: Legal writer Lisa Coleman encourages all small business owners to consider carefully the effects a divorce can have on their business, and be diligent in their search for a divorce attorney. Katz & Phillips, P.A., a group of divorce attorneys around Orlando Florida, are experienced and knowledgeable about divorce law, and able to represent a small business owner during their divorce proceedings.