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Does your spouse have a claim to your business during divorce?

| Sep 18, 2020 | Uncategorized

As a business owner, you have likely had to take various measures to protect your company from outside threats. You may have obtained trademarks and patents to protect intellectual property, had employees sign nondisclosure or non-compete agreements, and created contracts to prevent unexpected issues from creating problems in a business relationship.

While protecting your company from bad business deals may seem obvious, it is also important to protect your business from issues in your personal life. For example, if you are heading for a divorce, ending your marriage could have a greater impact on your company than you initially thought.

Have you protected your company enough?

Your mind may be reeling as you think of the ways your spouse may attempt to obtain business assets or even a portion of your company through your divorce proceedings. If you are wondering whether you have taken necessary precautions to protect your company, you may want to ask yourself the following questions:

  • Did you spouse play a role in your business? If your spouse did not have any connection to the company and did not help fulfill any company roles, he or she may have little claim to your business assets.
  • Did you sign a prenuptial or postnuptial agreement? In a best-case scenario, you would have created a prenup or postnup that included protective terms for your business.
  • Did you create an LLC or another type of business entity? A business structure other than a sole proprietorship can better separate business assets from your personal assets, giving your spouse less claim to them.
  • Did you pay yourself a competitive salary? You may think that paying yourself less would work in your favor, but if that is the case, your spouse could claim that the majority of the earnings went back into the business and left the household out.

If the answers to these questions are not what you had hoped, you do not have to feel out of luck. You may still have various options that could help you protect your business, including negotiating strongly during property division proceedings. Even if you cannot fully prevent your spouse from having a claim to the company, you could be able to buy your spouse out of any claim he or she has.

Obtain useful support

Because this type of issue can be complicated, especially during divorce, you will certainly want to have the right information and help throughout your case. Fortunately, you can enlist the help of a North Carolina attorney experienced in handling complex family law cases in an efficient manner.