When facing a high-asset divorce, your business can be one of your most valuable and vulnerable assets. Protecting your business interests is crucial to ensure professional and financial stability postdivorce. Knowing how to safeguard your business during this challenging time is essential.
What is the role of your business in the divorce?
Your business may count as a marital asset. This is especially true if you started or grew the business significantly during your marriage. This means it could be subject to division in the divorce settlement. However, there are strategies you can employ to protect your company’s interests and maintain control.
How can you protect your business?
To protect your business during a high-asset divorce, you may want to consider the following steps:
Get a professional valuation
You may want to hire a reputable business appraiser to determine your company’s fair market value. This objective assessment can help prevent disputes over the business’s worth and provide a solid foundation for negotiations.
Consider a buy-sell agreement
A buy-sell agreement can be helpful, especially if you have business partners. This contract outlines what happens to an owner’s share in case of divorce, death or other life events. Thus, it can help prevent your soon-to-be-ex-spouse from becoming a business partner.
Explore compensation options
If your spouse claims a portion of the business, consider offering other assets in exchange. This could include real estate, investment accounts or a larger share of retirement funds. The goal is to keep your business intact and under your control.
Maintain detailed financial records
Accurate and comprehensive financial records are essential. They can help demonstrate the business’ actual value and your contributions to its growth. This documentation can be vital in negotiations during your high-asset divorce. They may also be helpful in court proceedings.
Protecting your business during a high-asset divorce requires careful planning and expert guidance. You may want to collaborate with an experienced divorce attorney who understands the complexities of business valuation and division. They can help you through this challenging process while safeguarding your professional interests.