A Pennsylvania business owner might be concerned about the future of the company if divorce enters the picture. Although a prenuptial agreement might be used prior to marriage to safeguard one’s company, growth during the marriage might create a situation in which one’s spouse might be entitled to an interest in the company in the case of a divorce. The dramatic scenarios that often make their way into national news don’t imply that a business will be torn apart just because the marriage ends. It is important, however, to plan carefully.
Because a business could be a crucial factor in an individual’s ability to comply with spousal support requirements, many judges will recognize the importance of preserving the company’s value and operation. An interest might be granted to the other party, but a judge won’t necessarily hand the entire company over to that individual. However, a business that has been developed through similar efforts of both parties might be addressed through more equal division strategies.
In considering divorce, a business owner might want to minimize financial obligations to keep debts and liabilities low. Further, it might be important to consider how to fairly treat the other party if they are employed by the company. Mistreating that individual or using the company to mask one’s assets could draw a negative response from a judge. Ideally, it might be helpful to negotiate an amicable solution to property division outside of court. However, the agreement must be approved by the court to make it legally enforceable.
As a business owner considers filing for divorce, it may be helpful to discuss the situation with an attorney to identify business risks and other financial challenges that may be faced. Additionally, legal counsel might provide important strategies to minimize the impact of the action on the business.