Your business is the result of late nights and early mornings. After years of hard work it would be devastating to see it lost in divorce. Unfortunately a large amount of business owners in Northern Michigan will face divorce at some point. Certain precautions can protect a business in divorce proceedings.
For example, a prenuptial or post-nuptial agreement is an effective method to protect a business. These agreements may be unpleasant to talk about, but they can shield your life’s work from garnishment. Another method is to establish a Domestic or Foreign Asset Protection Trust. This would allow you to transfer ownership of the business into the trust, shielding it in divorce proceedings. Ultimately these measures must be in place years before discussing divorce with your spouse. Many business owners will need to consider other options.
Did you start your business before marriage?
If you started your venture before getting married then your business will be considered individual property. This type of property is typically not divided in divorce. If your business remained the same value from the start to the end of your marriage, then it may remain untouched in the settlement process.
However, it is more likely that your business has gained value since the beginning of your marriage. That increased worth very well could be considered joint property. This means the increased value of your business could be subject to division in divorce.
It is not too late
If you started a business after marriage or if your business has gained value since marriage then it is subject to equitable distribution in divorce. That does not necessarily mean that you will lose your business in the settlement.
There are measures you can take to protect your business. Equitable distribution does not require you to give up half of your business. Your spouse may not be interested in taking the business at all. Instead, they are likely interested in receiving a fair share of its worth. You may need to offer something else equally as valuable, allowing you to keep the business.
First, a divorce attorney can connect you with a business valuation expert. They will be able to determine the value of your business and the value of growth since the beginning of your marriage. Then your attorney can help you determine what assets can be substituted in the settlement. Therefore, you can substitute the home, stocks, a vehicle or any other asset that fits your needs.