Maryland business owners should protect assets during divorce

The end of a marriage is a challenging time for most Maryland couples. A lot of issues typically need to be addressed, from child support to property division. If one spouse owns a business and fails to plan ahead, those assets may also end up being split, jeopardizing the future of the company and the spouse’s income. Taking preventive measures to protect the business may go a long way to minimize the potential impact of divorce.

Before the wedding, a business owner can take steps to divorce-proof his or her company. This can be done through a prenuptial agreement that lists the business as individual property, exempt from the division of marital assets upon divorce. If it is too late for a prenup, a postnuptial agreement can accomplish the same goal.

If there is no pre- or postnuptial agreement, there are still steps that a business owner can take after the divorce process has been started. Typically, this involves buying out the spouse’s share of the business assets. Depending on the situation, there may be a few ways to finance this, so business owners may find it beneficial to weigh their options.

There are many issues that can impact a Maryland business. Given the high rate of divorce in our country, business owners should consider the devastating impact this may have. Without protections in place, the business may need to be liquidated or the former spouses may need to learn how to be business partners. Taking the steps to prevent these situations may allow the business to continue prospering and providing income.

Source: bizjournals.com, How to divorce-proof your business, Rosemary Frank, March 2, 2014