How To Protect Your Business During Divorce
Divorce is a complex process that can take a toll on many aspects of a couple’s life, including their business interests. If you or your spouse own a business in Florida and you are considering divorce, there are a few steps that you can take to help protect it. Read on to learn more.
Obtaining a Business Valuation
One of the most important steps that a couple can take when attempting to protect their business assets during divorce is to make sure to obtain a professional business valuation. This process involves working with a qualified appraiser who assesses a variety of factors, including not only the company’s assets, but also its liabilities and cash flow, all of which can be used to determine the fair market value of the company. Without such a number, couples will be unable to come up with a plan for how that company should be divided. Basically, a valuation is necessary to establish a foundation for discussions regarding asset division and can also be used to negotiate a buyout of the other party’s share of the company.
Maintaining Financial Transparency
Another thing that business owners will need to focus on during the divorce process is ensuring financial transparency of their business-related records. Business owners must have complete and well-organized documentation, including:
- Financial statements;
- Tax returns;
- Bank statements;
- Company contracts; and
- Insurance documents.
These records should all be accurate and stored in an organized manner so that they’re easy to find and interpret. By ensuring the accuracy of such records, business owners can help determine the value of their business and minimize difficulties during the asset division process.
Establishing Separate Finances
To help protect their businesses during divorce, owners should be sure to maintain a clear separation between their personal and business finances. One of the best ways to do this is create separate bank accounts for business-related financial transactions. This clear distinction will help emphasize the independence of a business from a couple’s personal assets and could even reinforce that it isn’t a shared marital asset at all.
Drafting Prenuptial and Postnuptial Agreements
Another way to help protect a business requires that couples take steps before divorce is even contemplated. One option, for instance, is creating a prenuptial agreement that outlines exactly how certain assets, including a business, will be divided in the event of divorce. A person can even specify that a business is not subject to division at all. For those who don’t have a prenuptial agreement in place and are already married, it could be a good idea to enter into a postnuptial agreement, which can similarly be used to protect business assets if the parties decide to divorce.
Consult Sandra Bonfiglio, P.A. During Your Divorce
Protecting their business assets during divorce often tops the list of the biggest concerns for divorcing couples. For help taking protective measures to safeguard your own company, please call experienced Fort Lauderdale property division lawyer Sandra Bonfiglio, P.A. at 954-945-7591 today.
Sources:
leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0000-0099/0061/Sections/0061.075.html
forbes.com/sites/catherineschnaubelt/2019/03/15/how-to-divide-the-family-business-in-a-divorce/?sh=1493380942fe
