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Seeking guidance when the future of your business is at stake

If you and your spouse have decided to take separate paths, you may have concerns about how the outcome of your divorce might affect your life moving forward. Chances are, you will likely want to protect your financial future during such a potentially stressful and daunting life event, but you might be uncertain how to pursue this goal.

Perhaps you own a business and subsequently wonder what will happen to it throughout this process. There may be certain steps you can take to safeguard the future of your business during divorce.

Protecting a business throughout divorce

If you have a prenuptial or post-nuptial agreement in place, it may dictate what will happen to your business in the event of a divorce. Without an existing agreement, there are additional measures that might help keep your business interests intact, such as:

  • Business as separate property:  If you started the business before marriage, it could be separate property and thus not subject to property division. However, if you mix business assets with marital assets in any way, it may lose its separate identity.
  • Valuation of business:  If the business increases in value during marriage, your spouse could be entitled to a portion of this increase. Obtaining a valuation of your business at the start of marriage and before entering divorce negotiations could help you avoid a potential financial disaster.
  • Spousal involvement:  Protecting your business may also hinge on how involved your spouse is or was in the success of the company, and limiting his or her role during the marriage could prove beneficial.
  • Negotiations:  You might also consider giving up ownership of other assets, such as a home, in exchange for sole possession of your enterprise.

Paying yourself a competitive salary instead of putting all your profits back into a business could also be beneficial because if you don't warn a salary, your spouse may claim he or she didn't receive the benefits of these profits during the marriage.

Seeking guidance

With numerous crucial areas to consider during the end of a marriage, you could be feeling somewhat overwhelmed by the process. However, you likely don't want to see the business you worked so hard to build suffer in any way. You could speak with someone with extensive knowledge in Pennsylvania state laws surrounding your current situation for guidance on protecting its longevity. Obtaining assistance in covering every aspect of divorce could prove beneficial in preparing you to pursue the most favorable outcome achievable concerning the future of your business.

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