What options do I have for saving my business during a divorce?
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What options do I have for saving my business during a divorce?

| Jul 23, 2020 | Firm News

Divorces can result in significant changes in the lives of those involved. Child support and alimony, custody and visitation rights, and asset division all change the way ex-spouses live after a divorce. If a spouse owns a small business, it may also be at risk if a divorce comes. What can business owners do to protect their company?

There is a lot to know about how divorces interact with businesses. While it is essential to understand what may happen when a divorce comes, there are efforts business owners can take before a divorce to secure their business.

Prenuptial agreements

Prenuptial and postnuptial agreements are like the seatbelts of a marriage. They are not a sign of expecting a divorce, just a precaution for if one occurs. Make sure your agreement is in writing; verbal agreements will not hold up in a divorce. The agreement must also not be a product of coercion and in full disclosure.

Keep business and marriage separate

If your spouse is involved with your business, they will have a stronger claim to a portion of the company if a divorce should come. Whether they were a front desk employee, helped run the business, or contributed financially, they may be able to take a more significant percentage of the company than you hoped.

Do not overpay yourself

If you give yourself only a competitive salary from your business and put the rest of the profit back into the business, it can prevent your spouse from claiming a more significant percentage of the company, as you only earned a competitive wage. If you overpay yourself too much, it can be proof of your business’s wealth.

Use your business to keep your spouse out

Operating, partnership, or shareholder agreements may be able to prevent your business from a divorce. Provisions in a contract can place a requirement that unmarried shareholders need to get a prenuptial agreement before marriage, or they could prohibit transferring shares without partner consent.


If a business owner did not take any of the previous steps, they could attempt to buy their spouse’s share of the company in the divorce. They can use assets like cash, stock, and real estate in exchange for the spouse’s share.

Take proactive measures today

If you own a business and are engaged or already married, consider taking some of these precautions to protect what you have built. Do not wait until it is too late to do something for yourself.