Ways You Can Protect Your Business During Your Divorce

 Posted on November 23,2018 in Divorce

If you are a business owner, chances are your business is one of the most valuable assets that you own. Along with the family home and your savings accounts, your business must also be appraised and distributed properly during your Michigan divorce. Often, small businesses require hours upon hours of tireless work and days of patience while the company is built from the ground up. The last thing you want to see is your business become just another asset that is taken apart, piece by piece, and liquidated to divide in a divorce. Fortunately, there are a couple things you can do to protect your business as much as possible. Here are five ways you can help keep your business under your control during (and after) your divorce:

Protect It in Writing

The easiest way to protect your business during a divorce is by getting a prenuptial agreement. The agreement can state how the business will be handled in the event of a divorce and it can also basically prevent your spouse from getting any of it. If you are already married, a prenuptial agreement will do you no good, but a postnuptial agreement can help. This is basically the same thing as a prenuptial agreement, but it is signed and entered after you are already married.

Pay Yourself a Decent Salary

This can be important because if you do not pay yourself enough money, your spouse can argue that he or she did not benefit from the growth of the business. Instead of taking a modest salary and waiting for retirement, take a generous salary, that way you can say you “invested” your profits into the family, rather than putting it all back into the business.

Get a Fair Valuation

This is important because the valuation of your business is what the courts will go off of when determining how much each spouse gets. This is also how the courts will determine how much your business has grown since you have been married. A business that has seen exponential growth during your marriage makes it so that your spouse can argue that they contributed to that growth, therefore deserve a portion of the profits.

Negotiate with Other Assets

If you are trying to shut your spouse out altogether, consider just buying them out of their portion of the business. If you have other assets, such as the house or a car, consider trading them for their share of the business. Divvying up your assets is all about negotiation and everyone may be able to get what they want this way.

Hire an Oakland County Divorce Lawyer Who Is Skilled in Dealing with Business Concerns

Seeing as anywhere from 40 to 50 percent of marriages end in divorce, it is not uncommon to see those who own a business go through a divorce. When you, as a business owner divorce, there are certain considerations that must be made that others do not have. Instead of losing half of your business to your soon-to-be-ex-spouse, contact a Novi, MI divorce attorney who has experience dealing with the implications that divorce has on your business. Contact Elkouri Heath, PLC to discuss your specific circumstances and determine your best course of action. Call our office today at 248-344-9700 to set up a consultation.

Sources:

https://www.nfib.com/content/resources/legal/a-small-business-owners-guide-to-divorce/

https://www.inc.com/guides/2010/05/protecting-your-business-from-divorce.html

https://www.businessinsider.com/how-to-protect-a-business-from-divorce-2015-6