What’s yours is mine, what’s mine is yours? Divorcing couples who have a business together not only need to settle their personal financial situation, but also their professional one. If only one-half of a couple owns a business, protecting your interests in case of Michigan divorce is crucial.
If Only There Were Marital Insurance
While some companies are trying hard to make “divorce insurance” or “marriage insurance” fly, the best protection you have in a marriage is a prenuptial or postnuptial agreement, especially if you own a business. You don’t have to be filthy rich to get a prenup in Michigan, or anywhere – this legal documentation can protect one thing or multiple things in the event of a divorce.
The point of insurance is to protect yourself financially should an unforeseen, unexpected, and undesirable situation arises. All these adjectives could be used to describe a divorce.
Whether you are a principal of a major corporation or run the popular pizza joint in town, divorce is a threat to any business-owner, and the future of their operation. Getting a business of any sort off the ground requires major capital. Maybe you and your spouse have made it happen together. Perhaps you did it all on your own before you got married. Whatever the situation, when your business is your livelihood, you need to protect it – and yourself – in case of divorce. Enter the prenup.
- If you own your own business: Designating your business as separate property in a prenup can keep your business out of the marital estate, no matter how much your spouse contributes to the business.
- If you start a business alone while you’re married: If your business start-up is not a joint venture, creating a formal agreement to structure your company will typically include a provision that outlines what will happen to the business should you get a divorce. Where does a prenup come in? The language in the prenuptial agreement can waive the spouse’s interest in the business and limit their ability to acquire ownership.
- If you and your spouse start a business together: Unless your prenup states how your business shakes out for each party in the event of a divorce, your ex could make a very good case – based on effort, their own financial contribution, or otherwise – that they’re entitled to a large portion of the business, especially if you didn’t pay them a competitive salary.
Protect Your Business – and Yourself – from Financial Ruin
Divorce is about separating from each other in all ways. It stands to follow that keeping your business separate from the marriage in all ways helps protect everyone’s interests should your marriage go south. If you invest marital money in your business, your spouse could be entitled to a percentage of the biz. The complications just get bigger the more your personal relationship gets wrapped up in your professional dealings, from taxes to bill paying.
If you do not have a prenup or postnup, you need to know how to protect yourself and your business before filing for a Michigan divorce. Contact Femminineo Attorneys in Macomb, Michigan, for help and advice.