Divorce and Your Business
In our previous post we discussed what to look out for with divorce and your estate plan. This post will observe two planning strategies to use if you’re a married business owner.
The truth is that a business is typically the largest asset to deal with- proper planning and consideration beforehand should be given to protect the business if a separation or divorce occurs.
Two Key Considerations:
- Marital Agreements – Depending on timing and other factors, having an open discussion and potentially putting an agreement in place between spouses is the best approach. This conversation should address who would own the business in the event of a divorce and how the business would be handled.
- Buy-Sell Agreement – Especially in circumstances where you have a business partner, a complete and comprehensive buy-sell agreement can provide protection to the business and the divorcing owner. Worst-case scenario is having your business pulled into an emotional divorce proceeding. Having decisions made beforehand about how divorce is treated as an event of sale can alleviate this fear from becoming a reality.