Nearly everyone facing a divorce feels some anxiety over what will happen to the money and assets of the marriage and how their finances will look post-divorce. The process of divorce can be even more complicated and stressful when one or both spouses own a business. To get through your divorce while keeping your business intact, follow the tips below wherever and whenever possible.
Have a Postnuptial Agreement in Place
Like the prenuptial agreement, its more famous counterpart, a postnuptial agreement can help protect assets should you get divorced. Since your business is an asset, you can protect the livelihood and success of your business by having a postnuptial agreement in place that spells out how the business assets will be divided if you decide to get divorced.
This agreement has “post” in its name because unlike the prenuptial agreement, this is created after your marriage legally begins. It can determine how you and your spouse would handle many areas of the divorce, including division of assets, if the marriage ends. Keep in mind, however, that a postnuptial agreement may not be effective if you create it shortly before you and your spouse formally file for divorce. A family law attorney can advise you on the requirements for a valid postnuptial agreement in New Mexico and answer any questions or concerns you may have. If your agreement does not follow state laws, it will not be valid when you need it.
Naturally, if you are not married yet but concerned about what could happen to your business if you do marry and it doesn’t end well, go with a prenuptial agreement instead.
Don’t Decide to Divide the Business in Half
As the divorce process goes on, people sometimes become anxious and frustrated, feeling as if it will never be over. They want to end the divorce as soon as they can and move on with their lives. Because of this, a divorcing business owner may make mistakes that jeopardize the future of their businesses and their lives.
One common mistake business owners make is deciding to just divide the business in half with their soon-to-be ex-spouse. In reality, it’s not common for divorced spouses to run a business together in a successful way, especially if there was tension in the relationship leading up to and/or during the divorce. If you can’t work with your spouse now on some areas of the divorce agreement, it’s tough to imagine you will be able to make good business decisions together in the future. Even the most civil of divorces can have rough patches that affect the overall relationship by the end, and finding that out when you’re trying to run a business together is not ideal.
Instead, you’ll want to look at other ways you can split assets without having to carve your business down the middle. You may be able to trade other assets your spouse wants in exchange for his or her interest in your business, for example.
Talk to an Experienced Attorney as Soon as You Can
Any person who is thinking about or going through a divorce can benefit from seasoned and skilled legal representation. A knowledgeable family law attorney can help you determine what the true value of your business is, detail the options you have to divide the business, and fight to ensure your business will remain a success before and after your divorce papers are signed. Last but certainly not least, your attorney will make the process less stressful and confusing by ensuring you fully understand the complicated process of dividing a business in a divorce.