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Divorce always comes with complications. Even in divorces involving people who have only been married a short time and have no kids or large shared assets, the process is often messy and complex. After issues involving children, owning a business with your spouse is pretty much the most complicated issue to resolve in a divorce. There are ways to make the process simpler, though. Here are a few suggestions for a clean break.
The Dos
There are many things that you can do to make the process of splitting a business in a divorce easier.
Do Sign a Prenuptial Agreement
Prenuptial agreements can be a bit of a tricky topic to bring up when planning to get married. However, it is something that should really be considered if one spouse owns a business when the marriage begins. If worried about the prenuptial agreement in general, then it might be best to propose this contract with this single item being the only thing to which the agreement pertains.
The pragmatism of making sure that you never have to worry about this single complicated issue can be quite enticing. It might be enough that even a spouse weary of such agreements, in general, will sign an agreement concerning this one item.
When you start a business with your partner after a marriage has begun, you can sign a postnuptial agreement agreeing to how the assets will be split in the event of a divorce, before you even begin the business.
Do Speak to an Attorney
Due to the complicated nature of a divorce that involves a business, you are going to want to not only consult with a divorce attorney but with a business attorney as well. You’ll also want to make sure the two are authorized to speak with one another in regards to your divorce.
Do Provide Your Lawyers With Documentation
Make sure to share all documentation regarding your business with your divorce lawyer Sugar Land as soon as possible.
Do Operate the Business as Usual
While it may be difficult to keep the business running normally during your divorce, it is very important that you attempt to do so. This can be particularly challenging when both partners are very hands-on with the business. Do your best. At least being able to show efforts on your part to maintain normal operations will be helpful even if your spouse is not on the same page.
The Don’ts
Just as there are things you can do to make the whole process easier, there are also things that you should avoid at all costs in order to put yourself in the best position.
Don’t Sabotage Your Business
It may be tempting to get back at your spouse by intentionally harming your shared business, but it is not a good tactic to take. Not only will you be hurting your own interest in the company, but all records of the business will be examined during divorce proceedings. If it is clear that you have intentionally hurt your business, you could be forced to pay your spouse for the money they lost. In this case, the sabotage would be entirely against yourself.
Don’t Try to Cut Your Spouse Out
This approach may also be tempting and appear to be less harmful to yourself. However, interfering with your spouse’s rights regarding your business will be viewed negatively by the court during divorce proceedings.
If you feel that you need to cut your spouse out, not as revenge but to protect the business, go to the court for an emergency injunction. If you can show that your spouse is intentionally harming your business, a judge is likely to grant your request. This way, you can stop your spouse from destroying your business without infringing upon their rights.
Don’t Change How Your Business Is Run
During the process of going through a divorce with your business partner is not the correct time to make major changes to how your business operates. Consult with your attorney before speaking with your spouse about any changes you think need to be made for the business to thrive during a divorce.
Deciding How to Split the Business
There are three main options for how to divide the business once the divorce is finalized.
If you and your ex-spouse maintain an amicable relationship, you can choose to continue to run the business together. Or you could have one of you run the business while the other maintains their investment in the company but steps aside from operations. You can also have one spouse buy the other out of their interest in the company. Finally, you can sell off the business or dissolve it and divide the assets.
Divorce is a terrible time. Do everything in your power to make things easier on everyone, and don’t complicate things unnecessarily. Consult this California divorce guide for more tips on how to make your divorce go as smoothly as possible.
You may also like: Property Settlement During Divorce In Virginia: Know it All!
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