Business owners can protect themselves during divorce

When spouses walk down the aisle in Massachusetts, they generally do not expect to break up several years or even months later. Unfortunately, though, about 50 percent of marital unions end in breakups nationwide. Here is a look at how business owners can protect themselves from divorce.

First, creating a limited liability company, corporation or trust can help a business owner to protect his or her business assets in the event a divorce happens in the future. This is especially the case for business owners who incorporate prior to getting married. Those who incorporate, create a trust or form a limited liability company essentially develop a completely separate entity capable of holding the ownership of the business’s assets — for example, the company car. In this situation, however, it is critical that a business owner avoid covering company expenses using marital assets; otherwise, the court will view the business as marital property.

Second, a business owner may want to create a prenuptial agreement before getting married. Alternatively, a business owner who is already married can have a postnuptial agreement drafted. These agreements dictate ahead of time what would happen to the company and other assets in the event of a divorce down the road.

Divorce can understandably be financially challenging, especially if a business owner was not prepared to go through one. Fortunately, even if a divorcing business owner failed to incorporate or did not have a prenuptial agreement in place, this individual and his or her spouse may still take advantage of the opportunity to engage in informal divorce negotiations, thus avoiding further court intrusion. An attorney can provide the direction needed to pursue the most personally favorable outcome during a marital dissolution in Massachusetts.