As a business owner in Maryland, who is considering divorce, protecting your company might be one of your primary concerns. Divorce can affect your position and even threaten its success, but there are options for you to protect the business beforehand and to address the possible impact of it during and after the divorce is final.
The emotional impact of divorce
Because divorce emotionally affects both parties, it can also take a toll on the business. If you are focused on the issues related to the divorce, you might not be able to focus on the business decisions that need to be made. If both you and your spouse are involved in the running of the business, the tension between you can affect the environment in the business. Finally, if during the divorce negotiations, your spouse is granted an additional stake in the business, the dynamics of it might change, even affecting your position in the business.
What can you do to protect your business?
Your options will depend on when you decide to protect your business interests. However, planning early on or even before the marriage for existing businesses can save a lot of stress if the marriage ends in divorce. Some of your options include:
• Signing a prenup before the marriage or a postnuptial agreement afterward that addresses your business interests in case of a split
• Keeping business and marital finances separate to avoid the risk of commingling them
• Negotiating with your spouse so you can keep the business in exchange for another major property, such as the family home or another large investment, during the divorce settlement
If you are unable to protect your business interests and these are divided during settlement, you still have some options. These include selling the business and splitting the proceeds or buying out your spouse’s interest.