The American Dream is the belief that anyone can achieve success if they work hard enough. For many people, their own American Dream is realized through business ownership. In 2010, there were reported to be around 27.9 million small business in the U.S. Comparing that statistic to the divorce rate, which is anywhere between 40 and 50 percent, it is safe to say that many divorcing couples have an extra question to ask: what happens to my business if I get a divorce?
Steps to Protecting Your Business
Owning a business is a rewarding experience, which is why you want to protect it at all costs. The easiest and least stressful option for protecting your business in the case of a divorce is to come to an agreement about the business in a prenuptial or postnuptial agreement. If you do not use either of these documents, there are still ways you can protect your business from being divided in a less-than-favorable way:
1. Get a Proper Valuation
The first step in protecting your business is making sure that it is valued properly. This is how the courts decide what your business is worth and how much each spouse is entitled to. The best way to do this is to get a court-appointed appraiser to evaluate the company and then have a private professional look over the numbers before you show them to the court.
2. Pay Yourself a Decent Salary
While it may seem odd, you should pay yourself a good salary rather than investing it all back into the business, or you could be accused of withholding some of the earnings from your spouse. Their lawyer could argue that the spouse was entitled to more of the company’s money, because not enough of it was put into the household.
3. Ease Your Spouse Out of the Business
As soon as possible, you should try to phase your spouse out of the business. The longer they work there, and the more effort they put into building the company, the more a lawyer can argue that they deserve a portion of the company, and the more likely a judge is to agree with them.
4. Give Up Other Assets
As a last resort, you can use other assets, such as cash, real estate, or other property, to bargain for your ownership of your company. Your business is an asset, and it will be valued and distributed like other assets. If you can negotiate with your spouse, you might be able to mitigate any obligation you have to share business interests with them.
5. Hire an Experienced Skokie Divorce Lawyer
When you own a business, it is often your most valuable asset. The last thing you want to do is lose it during your divorce. If you want to retain your business and keep doing what you love, you should hire an Elmhurst divorce attorney who is skilled in the area of protecting family businesses. Contact Weiss-Kunz & Oliver, LLC to see how we can help you protect your business, whether through a prenuptial or postnuptial agreement or through measures during the divorce process. Call our office at 312-605-4041 to set up a consultation.