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How to Protect Your Business in a Divorce

How to Protect Your Business in a Divorce: How to Protect Your Business in a Divorce: When getting married, no couple thinks that it could one day come to an end, but in some cases, it usually does. After being married for years, living together, creating wealth and building property together.

It is only fair that the property and wealth be divided equally down the middle. However, you may own a business or company that you had put a lot of your time, sweat and tears into or began the businesses before you met your partner. You would not want your spouse to get shares or ownership through a divorce process.

It would be best to teach yourself how to protect your business in a divorce. In the same breath that you hold health insurance as a cover over your life, you should protect your businesses before marriage. Even after getting married, you should safeguard your business as divorce for business owners is never easy. One just never knows until when the papers are signed and done.

Ways to protect your business before and During Your Marriage

Protecting your business from divorce will be easier when you take measures before you marry or follow up immediately after you get married. It does not mean that all hope is lost for those that thought about it too late. Being business partners with your spouse seems challenging, but as long as you are the clear business owner, then you are good to go.

Contract signing

You could do it if your partner signs either a prenuptial agreement or a postnuptial agreement. The legal documents bind and will stand during the divorce proceedings. You need to draft all the issues of concern and outline them in an easy-to-understand language.

In the agreement, you should specify that:

  • When it comes to your business, there is no division; it is your separate property outside of the marriage union. You save your business from scrutiny and evaluation by family courts by doing this. Your spouse’s attorneys will not look at your paperwork, receipts, profits, and files.
  • After dividing property, when it comes to the company, the gains made since the marriage are marital property but not the company. The number of shares offered to your partner should be little if any.
  • You will buy out your spouse from the business if there is a separation. The best divorce lawyers in Arkansas will tell you that it is possible to maintain the company after a divorce.

Prenuptial Agreements

It is practical to get your partner to sign a prenuptial agreement as you plan your wedding date. Clauses on property rights and alimony during divorce are covered. Doing this is a sure way to protect a business from divorce.

It would be best to tell your spouse to sign it before their attorney for the prenuptial agreement to weigh the divorce process. It would be best to remember that oral prenuptial does not count; the agreement must be in writing. According to Law Cornell, in the agreement, the partners agree on what they consider as separate or marital property.

The prenuptial agreement should contain the following elements;

  1. It should be signed voluntarily by your fiancée without being pushed. Timing is everything, and therefore do not make them sign the agreement when it is hours close to the wedding. They should do this when in the right state of mind.
  2. You have to reveal all that you own. Hiding assets is not recommended. If your partner’s attorney discovers that you did not disclose everything, then it may make the prenuptial agreement invalid.
  3. When drafting the contract, you are bound to focus on what favors your course. However, it would help if you tried to be lenient with your spouse to show that you are willing to give her a section of your spoils for the judge to consider it valid. An imbalanced prenuptial agreement is not good.
  4. Have someone witness the signing of the agreement. It adds proof whenever the validation of the document may be contested. You can have a judge as a witness.

Postnuptial Agreements

Due to some reasons, you may not get a prenuptial agreement, but do not worry; you still have the postnuptial understanding. Like the prenuptial, it contains all information concerning property rights; the only difference is that it is signed after marriage.

As per 26 USC 7701, it explains that postnuptial agreements are difficult to validate in several family courts from the few that recognize them. When partners sign the prenuptial agreement, they are still dependent because they can choose to walk out of the contract whenever they want.

The situation changes after they are married. The spouses are legally recognized and enjoy clearly outlined rights that cannot be tampered with. The legal process will have to scrutinize anything else added to the marriage mix. It is better to have a postnuptial agreement than to have nothing.

No Contract involved

It is up to you to safeguard your business assets even if you do not have a prenuptial or postnuptial agreement. You can do the following;

  1. You have to be seen, perceived, and recognized as the business owner.
  2. Have clear records for the business. You should be able to provide proof of the source of capital to protect your business from divorce.
  3. It would help if you did not mix your business assets with marital property. Always separate the finances.
  4. Thoroughly document all cash transactions in the company is involved.
  5. If your spouse works with you, you should not overpay them. Offer the standard market rate as income.


If you failed to sign the prenuptial agreement in your marriage, but you have since changed your mind, it is not too late. Divorce for business owners comes with many changes, but you can keep your business assets safe if you strategize correctly.

Get a good divorce lawyer who will counter any funny business from your partners, such as overpricing their contributions towards your company’s success in pursuing bugger shares or ownership claims. An uncontested divorce would be ideal, but that is rarely the situation.

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