Two key ways to divorce-proof your business
You should not have to worry about losing your business when you get divorced in Michigan. Luckily, there are some steps you can take now to protect your business from getting negatively affected by your divorce.
Get a prenuptial agreement
Prenuptial agreements are contracts that you make with your spouse before you get married. This agreement sets the rules for how you’ll split up your assets when you divorce. You and your future spouse agree on what is each of yours and then decide who will keep it after you separate. A prenuptial agreement can protect all or part of your business. You and your spouse can create the agreement together with lawyers so that it’s legally sound. Your lawyer may help you figure out what kind of assets you’ll want to protect with the prenup.
Take advantage of partnership agreements
You can also protect your business from divorce by signing a partnership agreement with your spouse. This is especially helpful if you have co-owned the company from day one. A good partnership agreement will clearly lay out how you’ll divide the profits and losses of your shared business, who’s responsible for what tasks in the company, and what happens to it if you divorce. If you don’t have a partnership agreement, you might not receive any of the profits or losses from your spouse’s work in the business after you split up.
By divorce-proofing your business, you are protecting what you’ve worked so hard for. You don’t want all that you’ve put into your company to go down the drain because of issues with a spouse during a divorce. Having a prenup and a partnership agreement in place for you and your spouse may provide valuable protection.