About half of all marriages in the United States end in divorce. That’s why it’s a good idea for people in Florida to prepare for the worst before they walk down the aisle. This is particularly true for entrepreneurs. A little planning can help business owners protect their assets in the event of a divorce.
Business formation and asset protection
Sometimes, the way a business is structured can offer protection in the event of a divorce. For example, if someone is a sole proprietor, their personal and business assets are often seen as commingled. Forming a business as an LLC can separate a company from personal assets.
Another option for protecting a business from being viewed as community property can be to place it in trust. That way, the trust is the owner of the business. Structuring a business like this can prevent it from being considered marital property, so it may not be divided like other assets in the marriage.
Without protections such as these, it can be possible for one spouse to lose half of their stock to their soon-to-be ex. In an acrimonious divorce where a buyout is not possible, this can cause serious problems for the business. In effect, it means that the ex-spouses might have to be unwilling partners at work.
One way to prevent all of these issues is to draw up a prenuptial agreement before the wedding. This isn’t pessimistic; it’s like buying insurance, and the truth is that it’s a good idea for couples to work these issues out while they like each other. An experienced family law attorney may help engaged couples write a prenup that’s fair to everybody.