When you have worked hard to build a business in New Jersey, the last thing you want to happen is to see half of its value given to your former spouse. Even worse is the scenario in which you are forced to sell your business to pay an ex-wife or ex-husband as part of a property division settlement. Situations like these do happen but you will be glad to know that there are ways to prevent this from happening to you.
Inc. gives information about several ways that you can keep your business value even in the face of a divorce. These include the following:
- Collect a market-value salary from the business at all times instead of putting all profits back into the business. This prevents those some of those profits from being considered marital property as they would have contributed to the marital household.
- Set up operational agreements that require any not-yet-married owners or shareholders to create prenuptial agreements before getting married. These contracts should clearly separate the business interest from the joint estate.
- Prevent the transfer of shares unless such an action is approved by each and every shareholder.
- Keep business and home separate by not going into business with a spouse or even having a spouse involved in ancillary ways with a business. Any involvement can set up the opportunity for that spouse to receive a percentage of the value.
This information is not intended to provide legal advice but general information about how to guard against business asset loss when getting divorced in New Jersey.
