We are now seeing 52 percent of first-time marriages end in divorce across the country. Though we would like to think otherwise, those owning a business may also find their selves being caught up in the divorce process.
Business owners obviously have their own set of concerns when it comes to divorce. Yet it is often to the benefit of both spouses to keep the business running efficiently.
Advance planning can often reduce the difficulties that come along when a divorce does occur. For example, prenuptial agreements can be used where stipulations are made as to which property will be considered business assets. This can provide spouses a better understanding as what they can expect to be divided up in the event of a divorce.
It’s often a good idea to keep family finances separate from those of the business. Family law attorneys may at times be asked to prepare buy/sell agreements between the two spouses that would prevent claims being made upon a business during the marital dissolution process. In such circumstances evaluating the worth of a business may be an option. This could then lead to buying out the other spouse’s share in the business (if any) and deciding how such a buy-out could be accomplished.
While advanced planning is generally advisable, the above steps are often not taken until one of the two spouses files for divorce. We have seen many divorce matters where division of marital property becomes the most essential issue. Pennsylvania has what is called the equitable distribution of marital property. But while such a system is in place, determining what would be an equitable distribution is not a simple process.
Source: The Business Journals, “How to divorce-proof your business,” Rosemary Frank, March 2, 2014