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How can you protect your business, finances before divorce?

Wealthy Minnesota business owners know that almost any decision they make could have effects on the company. Even if something is a personal matter, like getting married or divorced, a well-known businessperson could face backlash from the public if details surrounding the relationship or former relationship appear questionable. As a result, it is typically wise for affluent individuals to think about how to handle a divorce before they get married.

If you plan to tie the knot or have already done so, protecting your business may not have been the most romantic topic to discuss. However, it is essential to control as much of the financial details as possible for protection purposes. That does not mean putting your spouse on an allowance or monitoring every purchase, but it can mean taking steps to keep certain assets separate and intentions clear.

What can you do?

It is not always easy to know the best ways to protect assets, especially when the situation involves someone you love. Still, precautions can often prevent distress later, and the following tips may help you keep your business safe and your financial matters in line even if divorce occurs:

  • Have a prenup or postnup: A prenuptial agreement can create terms before marriage that indicate how to divide assets in the event of divorce and also address other topics. If you did not create a prenup, a postnuptial agreement may still be a viable option.
  • Keep income separate: If you and your spouse both have significant income streams, you may both feel comfortable keeping that income separate. However, it may be worth separating an inheritance or other income stream that only applies to one of you.
  • Think about spousal support: In the event of divorce, the higher-earning spouse may have to pay spousal support, or alimony, to the lesser-earning spouse. You may be able to address spousal support terms in your pre- or postnuptial agreement to prevent any surprises.
  • Remember marital debt: In addition to asset division, the court will also divide marital debt, so closing joint credit accounts and considering the option of refinancing any joint loans as individual loans may be in your interests.

Though preparing for divorce does not necessarily mean that your marriage will come to an end, it certainly pays to have these safeguards in place just in case. If you do not, you may face a difficult divorce case that needs court intervention at every turn.