Protecting a business in a Nevada divorce
Many people that divorce in Nevada and elsewhere have businesses they own, sometimes started long before their marriages occurred. When a marriage falls apart and a divorce petition is filed, the question of the business will most likely arise during the property division portion of the divorce. Business owners should take steps to preemptively protect their business from a future division in the event a divorce occurs.
When a person comes into a marriage with an already established business, their spouse may be able to argue that increases in value of the business that occurred during the marriage should be divided between the spouses. Failing to adequately protect a business may lead to the spouse gaining half-ownership or taking over the business. It may also lead to a forced sale of the business in order to pay the spouse their ordered share of the assets.
The best time to take steps to protect a business is prior to a marriage. Small business owners should consider prenuptial agreements. If a person is already married, a postnuptial agreement may be an option. Business owners should take care to keep the business’s assets carefully separated from the household assets, and it may also be a good idea to not involve the other spouse in any aspect of managing or running the business.
People who are business owners may do well by seeking a consultation with a family law attorney about available options to preemptively protect the business in event of a divorce. If a small business owner is already going through a divorce and the business is at issue, they may need help negotiating exchanging rights to other assets in order to retain full ownership of the company. Those with substantial assets may benefit by getting help before a divorce is filed.
Source: Entrepreneur, “How to Divorce-Proof Your Company,” Carol Tice, Aug. 8, 2011