Facing a divorce in New York is rarely a simple matter, but for entrepreneurs whose marital property includes a business, it is a potential disaster. If you own a business you hope to keep from the negotiation table in a divorce, you must act quickly and decide what is truly most important to you.
When divorce comes knocking, a business owner does not always realize that the business could be at the chopping block just like other assets like a family home or investments. Unfortunately for many business owners, their private life has the potential to affect many other customers and employees who depend on them to keep the business afloat.
When you face a divorce as a business owner, you must make some very tough choices. It is not impossible to save your business in a divorce, but it will almost certainly require your long-term commitment and willingness to make some hard sacrifices in other areas in order to succeed.
You should not hesitate to reach out an experienced attorney as soon as possible -- the longer you wait to begin defending your business, the more difficult it will be.
Act quickly and decisively
The best way to protect your business in these circumstances means using a prenuptial or postnuptial agreement that specifically protects the business in case of a divorce. However, for the sake of argument, we will assume that you are reading this now because you do not have such an agreement and are looking for a way out of a potential mess.
The most important thing to do first is to make sure that the business and your private life stay as separate as possible.
Keep clear and consistent records of all your business affairs, and make sure that you keep private assets and business assets completely separate.
If your spouse currently works in the company, remove him or her as an employee. If he or she served a significant role in the business for some time, that will be a factor in the negotiation.
Make sure that you pay yourself a fair salary compared to industry standards. If you do not, it may come back to haunt you and give your spouse legal ammunition to claim that you hid assets or denied him or her a fair share.
Saving the business is the priority over all else
Sooner or later, you will have to come to the negotiation table and find a fair division of assets to create your divorce settlement. When the time comes, if you truly wish to keep your business afloat or avoid splitting it up in the settlement, you might end up sacrificing many other assets you could rightfully claim.
Keeping the business off the negotiation table may mean letting the family home go, or other valuable assets like retirement accounts or personal property and collections.
This is never easy to accept, but it is the harsh truth you must face now if you hope to see your business survive your personal misfortune.
Of course, with an experienced, skilled attorney with years of negotiating fair settlements, it is possible that you may keep your business as well as a fair share of other marital assets. With proper legal guidance, you can ensure that your negotiation is professional and passionate, keeping your rights secure.