Many Florida residents dream of becoming their own bosses and managing corporations or businesses of their own creation. Though not every dreamer is able to turn their self-employment plans into reality, those people that do start their own businesses often spend a great deal of time, money, and energy in the effort to see their entities grow. Self-owned businesses often become family businesses when business owners marry or start their entities after they have entered into legal marital relationships.
Businesses that are owned by spouses who are ending their marriage can be dealt with in a number of ways. The divorcing parties may choose to maintain their business relationship despite the end of their personal relationship; not all divorcing couples are able to do this because of emotional difficulties and discord.
Divorcing parties may agree that one of the partners will buy out the interests of the other during the divorce, but this scenario can present its own challenges. It can be difficult for divorcing individuals to come up with the cash necessary to pay off a spouse to leave a family business, and, in some cases, both partners will be in such need of cash that they may need to sell the business outright so that they may each leave the business with money.
Individuals who start businesses before they marry may choose to protect their individual interests in the entities by asking their future spouses to sign prenuptial agreements that ensure the businesses stay the individual property of those who started them. Prenuptial agreements must meet a variety of requirements to be valid, and individuals who wish to execute these agreements may wish to speak with family law attorneys before attempting to use them to protect their business interests.
A successful family business may turn a regular divorce into a high asset divorce, which, as previously discussed on this blog, can introduce a variety of complications. Readers who want to know more about how divorce may affect their family businesses are asked to speak with their divorce or family law attorneys.
Source: marketwatch.com, "How to protect your family business during a divorce," Daniel Thompson, Feb. 10, 2017