Many times, one of the most important marital assets to be disposed of in a divorce is a small business. Starting a business with your spouse may help the two of your realize your entrepreneurial dreams, but it is not a guarantee that you will not need to get divorced someday.
When a married couple’s business and personal relationships collide this way, things can get heated, especially if the business is successful. The spouses each may believe that they personally made the larger contribution to the business and are entitled to keep it, or at least get the lion’s share of its value.
Obviously, both cannot get what they want. They may have to sell off the business and split the proceeds, a result one divorce attorney and mediator called “the worst-case scenario” in The Wall Street Journal. After all, the divorcing spouses probably did not work so hard to build their business only to dissolve it now.
One of the best ways you can protect your family business is to separate your personal and professional relationships with your spouse. Easier said than done, of course, but the Journal suggests approaching the division of labor and responsibilities at the business as you would if your partner were a stranger. This means establishing clearly defined job descriptions, which would make it easier to replace one of the spouses after a divorce. It also means creating a plan for buying out one of the spouses ahead of time, perhaps as part of a prenuptial or postnuptial agreement.
Nobody wants to think that their marriage might end someday, but planning for the worst can help make the process less emotionally draining and difficult.