Being a business owner comes with a lot of perks. Unfortunately, it can also further complicate an already stressful divorce.
If you are going through a divorce, it is important to understand some of the most important steps you can take to protect your business before you step into the courtroom.
1. Document everything
Start by gathering complete records of all your business finances, like bank statements and tax returns. Maintaining clear financial documentation both before and during your marriage will make it easier to establish an accurate business value and quantify any marital contributions.
2. Assess your business’s structure
Next, evaluate how you have structured your business. In particular, understand that the law will treat your business differently depending on whether it was established before or after you got married. Any increases in business value after you were married may count as marital property under Tennessee divorce law.
3. Utilize pre and post-nuptial agreements
Use pre and post-nuptial agreements to specify exactly what happens to your business and its assets in a divorce. Review any existing agreements with your attorney to make sure they are valid and enforceable under state law.
4. Protect your business with a trust
Consider transferring ownership of your business into an irrevocable trust to shield it from marital property claims. Holding your business in a trust will offer an added layer of protection during divorce proceedings.
Preparation is the best defense
Throughout your divorce, preparation will be your best defense. Take these basic steps to ensure your business — and the fruits of your labor — are not disrupted during this challenging time.
