Divorce is still prevalent for many Americans. And for those who own a business, a marital separation can ruin both their personal and company finances if they do not have the proper safeguards in place.
However, there are valuable resources one can use to help their business thrive during the emotional and financial turmoil of a divorce. One of the most important ways owners can protect their assets is through a prenuptial agreement.
Prenups can help institute ownership
Most owners do not want to share their business with their ex-spouse, especially if it was created before the marriage. A prenup can give owners more control over the future of their business if they and their spouse decide to split. In some cases, it can even protect the company from severe financial losses.
Enabling company protection
Setting up a prenuptial agreement can:
- Establish business as separate property: While value incurred during the marriage could be subject to division, prenups allow owners to establish the company as their own so they can stop the distribution of ownership during a divorce.
- Determine how much money the spouse gets from the business: By promising the ex-spouse a specific amount in interest payments, this can prevent them from requesting more money from company earnings.
- Give owners control over their income: Business owners often don’t take out the appropriate salaries for themselves. However, they may want to start if they’re going through a divorce. By keeping extra money in the company, owners may limit their capacity to create shared marital property and stifle their ability to set up an equitable distribution of assets during the separation.
Owners want to ensure their business is safe
Most business owners don’t want to think about divorce before getting married. However, taking the proper steps to protect their assets can help ease their worries. For business owners who are about to get married and looking to establish a prenuptial agreement, an experienced family law attorney in Columbus, Ohio, can help take steps to maintain ownership if the couple separates.