There are many small business owners in the Bay Area. Small business owners understand how hard it is to build and maintain a successful business. Often, they are hoping their business will continue to the next generation and for many years to come. But a divorce can complicate matters with a small business.
The distribution of assets is one of the most contentious portions of a divorce. This is the place where decisions are made that can seriously affect a person’s financial future. Small business owners need to be especially careful during a divorce as often the small business is valued. Many times, a financial expert will be consulted who will scrutinize the businesses assets and expenses along with business practices. A small business owner will need to provide extensive financial records as well.
Minimizing the effect of a divorce on a small business is important
There are various things that a small business owner can do to help minimize a divorce:
- Have good legal representation. An attorney who specializes in both personal and business aspects of a divorce can be invaluable
- Have a prenuptial or postnuptial agreement. A business can be protected if one of these agreements is in place.
- Refer to the business partnership agreement. If a business partnership agreement exists it can spell out a buyout or valuation of interest in the event of a divorce.
- Hire one financial expert. If there isn’t a prenuptial agreement or a business partnership agreement, both spouses can agree to hire just one financial expert to value the business. This can save money and help streamline the process.
- Consider a confidentiality agreement. For some businesses, keeping their business processes secret is important. A confidentiality agreement may be a good idea.
- Spousal payments may be an option. In many divorce situations, making payments to an ex-spouse over a period of time can be a good idea instead of having to make a lump sum payment which can jeopardize the business.
It is important for a small business owner to protect their business during a divorce. There are things a business owner can do to ensure their business survives a divorce.