Divorce is always tough, but for business owners and professionals, it’s even more complicated. When you have to split assets and decide the future of a business, things can get really tricky. What should you know about the divorce process and how it could impact your business?
Understanding the legal landscape
If you are a business owner or professional facing divorce, the first thing you need to do is understand how your local laws treat business assets in a divorce. In Ohio, the courts divide assets fairly, but not always equally. Each spouse receives a portion of their jointly-owned property based on what each person needs and contributed during the marriage.
It’s important to talk to a lawyer who knows about divorce for business owners to help you through these complex issues effectively.
Building a strategy to protect your company
For many owners, keeping their business running smoothly is a top priority. Here are some ways to protect your business during a divorce:
- Create a prenuptial or postnuptial agreement – These agreements can set rules for what happens to your business if you get divorced. If you have one, it can protect your business assets from property division.
- Pay yourself an appropriate salary – If you put all the money back into the business and do not pay yourself a proper salary, your spouse might argue they deserve a bigger share of the business because the family depended on its growth.
- Keep a boundary between your finances and your business’s finances – Clearly separate your personal finances from your company accounts by maintaining separate bank accounts and credit cards.
- Keep detailed records – Maintain clear and detailed records of your business operations, investments, and financial transactions. This documentation can be crucial in proving the value of the business and demonstrating your management and ownership.
- Know the value of your business –Getting the right value for your business is crucial in a divorce. You usually need to hire a professional business appraiser for this. The way you value the business can involve calculating its assets, calculating its future income or comparing it to recent sales of similar companies.
- Consult professionals –Engage a divorce attorney who has experience with clients who own businesses. They can provide guidance tailored to your situation. Additionally, a financial advisor can offer insights on how to manage business assets prudently during the divorce process.
By implementing these strategies, you can better protect your business during a divorce, helping to ensure that it remains viable and successful for the future.