Divorce is rarely a simple process, even when all the parties involved want to end the marriage and agree to work together amicably. In most cases, divorce drags up deep emotional conflicts and often drives otherwise reasonable people to their breaking point.
Business owners who are considering divorce face a number of potential complications that many others never experience, especially if an owner did not protect their business with a prenuptial agreement. It may come as a surprise to some that businesses qualify as marital property in the same way that homes or savings accounts do.
You must make it a top priority to keep your business protected if you want it to survive your divorce. Without a strong legal strategy, you may see your failing marriage sink your business as well.
Did you protect your property before marriage?
If you had the foresight to assemble a prenuptial agreement to protect your business, don’t assume that the agreement is bulletproof, legally speaking. If your spouse hires a particularly motivated divorce attorney, your prenup may not hold up in court, and you may end up dividing your business and other property anyway.
If you do not have a prenuptial agreement, you must move quickly to demonstrate that your personal life and your business remain separate. The more that your spouse is involved in your business, the greater claim they may have to a portion of its value. If you can keep your spouse away from the business, this may help create separation in the eyes of the court.
Creating separation between personal and business life
Without a prenuptial agreement, it is not an easy task to protect your business, so you must take action immediately. Be mindful to pay yourself fairly according to industry standards, to avoid the appearance of hiding money from your spouse by keeping it in the business instead of bringing it home.
It is crucial to keep your accounts separate between your home and business in Colorado. The less mingling there is between your personal and business accounts, the more separation you can show to a court.
Consider other options
If you cannot convince the court that your business should count as separate property, you may have to offer your spouse other assets to make up the difference. If you suspect this may be where you’re headed, don’t wait to put together a strong legal strategy to keep your priorities secure.
With careful planning and an honest assessment of your top priorities, you can move through this difficult season of life and on to the next chapter, keeping your rights protected along the way.