If you own a business, chances are good that you love what you do. That being said, you have probably discovered that owning a small business often comes with frustrations and risks that other Floridians don’t necessarily have to manage. You may need to be meticulous about tracking business expenses, income and tax liabilities. And when you get sick, getting some much-needed bed rest often comes at the cost of a full day’s profits.
Family businesses may allow for more flexibility and a shared workload, but they also come with their own tradeoffs. If you and your spouse jointly own a business, for instance, what will happen to that business if you ever decide to divorce?
Thankfully, the end of your marriage does not have to mean the end of your business. But the specific steps you’ll need to take to divorce-proof your business will depend on a number of factors, including whether the business is co-owned with your spouse.
If you are the sole owner of the business and are about to get married, you may want to draft a prenuptial agreement that clearly designates the business as separate property. If you are already married but own/run the business by yourself, you may be able to achieve the same divorce protections with a postnuptial agreement.
In either case, it may be important to keep your business finances and personal finances separate. If divorce ever becomes necessary, you will have an easier time demonstrating that your spouse did not contribute financially to the business.
Please check back later this week as we continue our discussion about steps you can take to make sure your business can keep going even if your marriage doesn’t.
Source: The Business Journals, “How to divorce-proof your business,” Rosemary Frank, Mar. 2, 2014