When people get married, no one is ever thinking about when the marriage will end. However, falling out of love and divorce is a very regular occurrence which anyone should be prepared for – especially as a business owner. If you are a business owner and you go through a divorce, your assets and your company are at risk. That is why if you are a business owner going through a divorce, it’s important to protect your company to avoid any financial or personal consequences.
These are a few ways that you can protect your company and assets when thinking about getting married and when going through a divorce.
Get a premarital agreement
Commonly knowns as a prenup, this is a step that needs to be taken before the marriage is even official. If you are a business owner, having a premarital agreement is an effective way to protect your business and your assets. Essentially it is a contract signed by both you and your spouse that outlines in detail what your expectations and property rights are in the case of a divorce. There are many misconceptions about getting a premarital agreement, where people may suspect you of not ‘trusting’ your soon-to-be spouse. But that’s not really the case. Think of a premarital agreement as a way of not only protecting yourself but your spouse as well. Roughly 38% of marriages in Canada end in divorce, that’s just the reality of things. So yes, although you truly love your fiancé before you get married, it’s important (particularly for a business owner) to think logically and not emotionally about your business and how you’re going to protect it should marriage go south.
If your spouse has a major role in your business…
You have a few different choices you could make. If your spouse owns part of the business with you, you can either find a way to still run the business together if that’s what you both decide, or you will have to buy out your spouse’s share of the business. Some divorced couples can still run a successful business together, but perhaps for a few more obvious reasons you may not want to work alongside your spouse any longer when getting divorced. Whatever choice you make, it’s best to examine it carefully and with a lawyer to ensure that you are still protected financially long-term and that your separation agreement is ironclad in keeping your finances and business protected. Although this is typically something we work through once we realize divorce is the final choice in terms of direction, it’s smart too when putting together a premarital agreement – if your soon to be wife or husband is involved in the business, that you include an exit strategy in that agreement as well.
Your Business and Divorce
If you are getting a divorce, you must disclose to your spouse the value of your business. If your spouse does not have an ownership interest in the business, they do not get one upon divorce, but you do have to account for the value of the business. In other words, you will keep ownership of the business, but you must share the value of it so you may have to pay some money to your spouse. All of this may be avoided if you have a prenuptial agreement in place that says otherwise.
If information about your business, such as the value of it, needs to be kept private from your competitors or just because you don’t want the world to know about your personal assets, we can help you find the right process to ensure privacy. If your case goes to court, your private information will be made public. We can help you avoid court to preserve your privacy.
Work with a lawyer who knows what they’re doing
By working with an experienced family law lawyer, whether this is before or after your wedding night, they can help you protect your business and ensure that any written documents cover everything and anything that may threaten the company you’ve worked so hard to build. At Galbraith Family Law, we can help you protect your business and assets if you are going through a divorce, or you’re popping the question to take your relationship to the next level. From premarital agreements to helping you navigate the divorce process, we’re here for you each step of the way. Our team of lawyers have years of experience and knowledge to protect you and your business throughout your divorce. Give us a call at one of our five locations in Barrie, Newmarket, or Toronto, and let’s make sure you’ve thought through crossing all your t’s and dotting those i’s before, during, or after your marital adventure.