Can a divorce effect your business?

On Behalf of | Oct 27, 2020 | Divorce

Couples in Colorado and other U.S. states who are facing divorce can go through a wide array of emotional and financial difficulties. While the distribution of assets can be complicated enough, things get even more difficult whenever a business is involved. Although most individuals never expect their marriages to fail, taking precautions to protect a business before divorce becomes reality is important.

Divorce can have a significant impact on a business. Even if the end of the marriage is uncontested, your ex-spouse may have a legal claim to everything you own. There are several ways to prevent divorce from affecting your business if the inevitable happens.

If you’re a business owner who’s thinking about getting married, entering into a prenuptial agreement beforehand could help to safeguard your business should things turn sour. If you’re already married, consider filing a postnuptial agreement to specify whether the business should be considered part of the joint property you share together.

You should also think about taking out an insurance policy that you can liquidate to prevent a sticky situation from affecting your business. Otherwise, if your divorce settlement costs more than what you have available, you can avoid a situation where you’d have to sell all or some of your business to settle it.

If you were under the impression that your marriage would last forever but it failed, there are still things you can do to protect yourself. Consider sacrificing other assets to retain 100% of your business. Or, you may be able to reach an agreement with your ex to pay the settlement out over time to keep your business interest protected.

Divorce can be complicated. Sometimes, entities like businesses can get dragged into complicated settlement agreements. If you find yourself in this situation, a property division attorney may be able to provide you with helpful guidance.