Hyland Law Firm, LLC
Kansas Business Lawyer Offers Tips on How to Divorce-Proof Your Kansas Business
On behalf of Hyland Law Firm, LLC posted in Kansas Business lawyer on Saturday, February 8, 2014.
If you are a business owner who is either married or even contemplating marriage, you need to be aware of the fact that you could lose all or a substantial portion of your business in the event of a divorce. Do not fool yourself into thinking that divorce cannot happen to your marriage. Unfortunately, divorce is a real possibility for any marriage and the best thing you can do to protect your business in the event of a divorce is to be proactive. Accordingly, the following is a list of things you may be able to do to divorce-proof your Kansas business:
- Have your fiancé sign a pre-nuptial agreement: The word "pre-nup" can be a six letter word to many happily engaged couples. However, the truth of the matter is that divorce is real and can be ugly. A prenuptial agreement may not be romantic but it is one of the most effective ways to protect your business. Think of a prenuptial agreement like you would life insurance. No one buys life insurance hoping his or her spouse kicks the bucket early. A person would also be a fool not to have life insurance. The same is also true about a pre-nuptial agreement.
- Put the business in a trust: A business is an asset to the divorce court, which has the duty of dividing the assets amongst divorcing spouses. One way to ensure that your business does not end up part of the divorce court garage sale of sorts is to make sure that you do not own it. This is the case when a business is in a trust. You no longer own the business; rather, the trust does. One of the advantages of placing a business in a trust is that you do not need the permission of your fiancé. This puts you at a definite advantage if he or she is not willing to sign a pre-nuptial agreement.
- Compensate yourself well: If your business if fairly young and still in the growing process it can be tempting to pay yourself a trifle salary and place the majority of your business' profits right back into the company. Although this may make great "business sense" it is not good in the event your spouse files for divorce. He or she may request and possibly receive a larger chunk of the business that he or she might normally have received because during the marriage he or she did not benefit from the business' successes.
- Carefully re-evaluate your spouse's role in the business: One of the most important things you can do to protect your business in the event of a divorce is re-evaluate your spouse's role in the business. If you spouse has a vital role in the business, you may want to change that. The more involved your spouse is in the business the more likely a court is to grant him or her a substantial portion of the business, that is unless you have a pre-nuptial or post-nuptial agreement or the business is owned by a trust.
- Have your spouse sign a post-nuptial agreement: A post-nuptial agreement is the same as a pre-nuptial agreement, with the exception that the document is executed after the parties are already married. Although this method can prove to be quite successful in the event of a divorce, it may be also quite difficult to convince your spouse to sign such an agreement.
If you have a business that you would like to protect in case of a divorce, you need to speak with an experienced Kansas Business Law Attorney to help you. To set up a free and confidential consultation, contact the Hyland Law Firm, LLC today. Charles Hyland is a seasoned business litigation attorney who fully understands how a divorce could potentially cost you your business. The Hyland Law Firm has worked with countless business owners to implement divorce-proofing tools. Protect your business by calling us today!