Make sure your business is looked out for in a divorce

When St. Louis-area residents elect to divorce, there are many factors to think about — lots of them financial in nature. Many of them are regarding issues directly connected with the family: dividing personal assets, possibly selling the family home, and setting up child support arrangements. However, family concerns are not the only considerations that need to be made when couples are going through a divorce.

Business owners have an extra layer of responsibility when their marriages are ending. For one thing, these businesses often provide income, sometimes as a sole source, to a family. Losing that business, either by having it sold off piece-by-piece or liquidated entirely, could be a drastic result of not planning properly.

Some folks may have come up with a prenuptial agreement that specifies what would happen to a business in the event of a divorce. People who are already married could complete a postnup, or postnuptial agreement, that spells out the same types of issues that could come up in the event of a divorce.

It is also often important for business owners — especially those with a small business — to keep business and personal finances separated and to collect a reasonable salary. A business owner whose business accounts bleed into personal ones and receive a tiny salary can have a hard time showing what expenses and revenues belong with the business and which belong with the marriage.

Regardless of a couple’s financial situation, having the proper legal representation can go a long way toward making the divorce process as painless as possible.

Source: The Business Journals, “How to divorce-proof your business,” Rosemary Frank, March 2, 2014

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