The hard work and effort that one puts into building a business is often hard to measure concretely. However, when a business owner finds him- or herself facing a high asset divorce, having a solid plan in place can preserve the company’s future. Florida residents who are preparing to file a divorce petition have some tools that may help safeguard their business.
One of the first tools is a prenuptial agreement. Though these contracts used to be common only among the wealthiest, or celebrities, they have become more mainstream. In the event that a spouse has worked to build a business before marriage, a prenup can ensure that the other spouse can be compensated with other assets while protecting a company’s future. If a business was started after a marriage, the parties may be able to enter into a postnuptial agreement that spells out how each party can be accommodated without having to dismantle the company.
Along with a prenup between the spouses, it is recommended that larger business plans include a divorce clause. This can stipulate how a former spouse will be compensated without compromising the company’s future. Another suggestion is for a business owner to come to a decision regarding how a business will be valuated. There are three methods of doing so, and each may arrive at a different value, depending on the nature of the business.
Some business owners may be tempted to reduce their company’s value. Doing so may backfire, as a court could rule that the owner provides for the other spouse based on the value of the company before the actions were taken. Lastly, professionals recommend that a business owner seeks to determine the true worth of his or her company before filing for a dissolution. Florida residents preparing for a high asset divorce may be best served by consulting an experienced family law attorney who can help draft a settlement agreement that best meets their needs.
