You're working really hard to build your business from the ground up in Florida. You're putting in long days and sweat equity to make it a successful venture. Your spouse doesn't want anything to do with the business, so you have been on your own.
But have you made that business divorce-proof? Even if your spouse hasn't contributed to growing the business, it could be considered marital property if you split up.
The best way to remove your business from your list of marital assets in a divorce is to sign a prenuptial agreement before you're married. The business could be listed as a separate property.
But in the event that business didn't launch until after your marriage, you could pursue a postnuptial agreement. It's the post-marriage equivalent of a prenup, and it can lay out for a judge down the road just what the two of you have agreed to where that business is concerned.
Another option is to put ownership of the business into a domestic asset protection trust. Your spouse does not need to sign off on this plan. Technically, you no longer will own the business; the trust will. Be aware that there are some limitations about what kind of businesses can be moved into a trust.
Here are a few other tips for business owners who want to protect their asset from a divorce.
- Don't mix your business and personal finances. Keep a household set of books and a business set of books.
- Don't bring your spouse into the business. If you do, they could ask for part ownership in a divorce.
- Pay yourself a salary that fits your position and the company. Your spouse could ask for a share of profits if they think you've denied your family the right amount of money by taking lower pay.
- If your spouse is insistent on a share of the company, consider trading other assets for sole ownership.
Even if your marriage is solid today, it isn't a bad idea to take precautionary measures to preserve your company – just in case. An attorney can provide more information on steps to take to divorce-proof your business.