As a divorcing business owner, what can I do to protect myself?

If you are a business owner in Knoxville facing a divorce, you might be concerned about protecting your business. There are a few different steps you can take to safeguard your commercial enterprise, some of which are best pursued before divorce is on the table. Forbes explains how you can retain control of your business and prevent your spouse from taking more than a fair share of assets.

Even if you failed to implement a prenuptial agreement, a postnuptial agreement can serve the same purpose. Both documents create certain rules that stipulate how a business and its earnings are to be divided. For instance, you can specify the percentage of your business’s value that would go to your spouse should you get divorced. You can also set up rules regarding your business itself and specify that it cannot be passed on to your spouse as the result of a divorce.

There are also steps you can take when it comes to the financial aspects of your business. Some spouses claim that they contributed financially to a business, which means they would be entitled to the proceeds. Keeping separate personal and business accounts establishes that your spouse made no financial contribution, which strengthens your argument about financial support.

If your spouse works for you or contributes to your business in some way, it is crucial that you provide a wage that is comparable to the market rate. In the event of a divorce, your spouse could make the argument that he or she was paid unfairly while working for your business. This makes it more likely that the court will award a hefty settlement to the other spouse, in order to make up for the disparity in payment.