Starting a small business is the dream of many couples. It excites them to think that they are their own boss and can earn more income moving forward.
But it has been said that business and marriage are not a good mix. In fact, the number of entrepreneurs who end up in a rocky marriage or divorce is on the upswing. Business owners are also believed to be poor in managing their work and home or family life. With the demands of their work that can make them stay up late at night and travel to other places, they are likely to encounter problems in time management and in their marital relationship.
Married entrepreneurs should take note of certain issues that they can possibly face in case their marriage becomes rocky. Keep in mind that a divorce can negatively impact an entrepreneur, said a Los Angeles divorce lawyer from Korol and Velen law offices.
Firstly, did you know that divorce can result in a tax on your total wealth? The tax can be as much as 50 percent or even more.
Secondly, there’s a likelihood that couples could end up selling their business in the end. This is possible as a way to finance the couple’s divorce settlement.
What are the ways then you can do to make sure that your marriage and business stay intact and that one of you don’t end up bankrupt should you and your spouse break up?
Get a Prenup or Postnup
A pre-nuptial or post-nuptial agreement is always your best protection. This should be a priority for couples doing business together and still planning to get married as it can predetermine the distribution of assets in the event of a divorce.
With this document, the couple knows what they’re getting into and what they will be getting in case they end up in divorce. They won’t even have to go to court should they decide to end their marriage.
It may not be necessary sometimes to sell your business just because your marriage has ended. Did you know that you can raise money against it and reach a better settlement?
A settlement can actually be structured so that payments are made over time to a spouse. This way, you preserve the business and sustain in onwards.
Another option that legal and financial experts approve of is to settle things amicably. If both of you want to keep the business and move on with your separate lives, sit down and discuss about dividing your assets.
This option not only saves you time but also money. An important point to consider, though, is that both parties should be honest about everything particularly when it comes to the financial aspect. This will make the process easier and faster.
If you are confident of your business, you can decide to give your spouse his or her share which should be half and move on. Otherwise, you can also sell the business and equally divide the earnings. That’s the short and cheap way of it.
Get Professional Help
It will help speed things up if you hire a divorce lawyer. A legal counsel can help in preparing the necessary legal documents and can give professional advice for your business.
You may also want to get a joint financial expert who can value the business and save you money. Apart from the valuation aspect, this expert can also assist you in organizing the books and records of your business.