Rowe Law Offices, P.C.
Call us for a free initial consultation
610-816-0935 Local
866-232-1913 Toll Free

Safeguarding a business against divorce

Residents of Pennsylvania may be interested in learning how to avoid pitfalls associated with safeguarding a business from complications in a divorce process. Building a business is difficult enough, but unexpectedly receiving the news that a spouse is filing for divorce can drastically affect entrepreneurial efforts. Taking the necessary steps to ensure a business is protected is crucial.

A common scenario among business owners is getting married with a small business and not filing a prenuptial agreement. Later, the business grows into a multimillion-dollar one -- and the owner's spouse now has stake in it. In some cases, an ex-spouse could end up with possession of the entire business.

There are some strategies that could help protect any business assets should a divorce ever take place in the future, such as filing a postnuptial agreement that defines the company as a separate asset. Other strategies are protecting the business's valuation by placing it into a trust as well as purchasing a whole-life insurance policy that can provide the necessary funds to buy the ex-spouse's shares, if necessary.

If the above preventative measures have not been taken and a divorce may be probable in the future, there is still hope to safeguarding the business. It is wise to make sure all personal finances are kept separate from the business and to maintain proper records. Firing a spouse is also an option if they have been inactive in the company. A business owner may consider retaining all of the company by offering other assets in its place, such as the family home and retirement accounts. Property division is a complicated process, especially in high-asset divorces. A divorce lawyer may help their client identify additional ways to prevent a business from being affected in a divorce proceeding.

Source: Entrepreneur , "How to Divorce-Proof Your Company", Carol Tice, August 08, 2011

No Comments

Leave a comment
Comment Information
Get in touch

How Can We Help You?

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Wyomissing Office
1200 Broadcasting Road
Suite 101
Wyomissing, PA 19610

Toll Free: 866-232-1913
Phone: 717-345-3208
Phone: 610-478-7725
Wyomissing Office Location

Lancaster Office
8 N. Queen Street
Suite 1102
Lancaster, PA 17602

Toll Free: 866-232-1913
Phone: 570-362-6837
Phone: 717-207-8375
Lancaster Office Location

610-816-0935 Berks County 717-345-3208 Lancaster County 570-362-6837 Schuylkill County 866-232-1913 Toll Free
610-478-8365 Fax
BBB Accredited Business Facebook