For entrepreneurs, their businesses may be their pride and joy. Getting divorced may be a tough hurdle on the road of life, but a person's business might seem like a fortress during such troubled times. After all, a successful business can provide an individual with financial security and a positive identity in Virginia. A few tips can help a person to protect his or her business when dealing with distributing assets in a divorce.
First, it is typically wise to include a business in a prenuptial agreement. The agreement will label the business as one's separate property if the person were to end up getting a divorce. Even if two people have already said their "I dos," a postnuptial agreement can accomplish the same purpose. This is an agreement regarding property division the couple enters into after marrying but before divorcing.
In addition, it may help to use shareholder or partnership buy/sell agreements to bar claims on the business by a spouse when a divorce takes place. Furthermore, it is expedient to make the business one's employer and then pay oneself a reasonable salary. The rest of the business finances can then be kept separately from one's personal finances.
Owning a business is a huge responsibility, and the thought of losing what one has worked so hard over the years to build may spark fear and anger. However, individuals can regain control over what happens to the business and other shared property by coming to a mutual agreement with a spouse regarding distributing assets. Both parties have the right to pursue their own wishes in such a situation while striving to reach a just and comprehensive solution with each other in Virginia.
Source: bizjournals.com, How to divorce-proof your business, Rosemary Frank, March 2, 2014