Successful business owners are usually good at planning for those contingencies that may jeopardize their ventures. Anticipating factors that may result in a setback allows entrepreneurs to work through those problems with minimal disruption to the business. However, when a business owner is facing divorce, the threat of disruption is very real. Pennsylvania entrepreneurs dealing with high-asset divorce may benefit from understanding the potential ramifications a divorce may bring and their options to minimize the negative outcomes.
With no protections in place, such as a prenuptial agreement, a business may be fair game during asset division. Even in an uncontested divorce, a business that an owner establishes or profits from during the marriage may fall under the category of marital assets to be divided during a divorce. When this is the case, skillful negotiations may benefit the business owner who wants to preserve his or her hard work.
Options when a business is on the line
An appropriate valuation of a business is an important first step. By determining the complete and mutually agreeable value of the venture, a business owner may have a better idea of what to do next, for example:
- Negotiate for the business in exchange for other valuables.
- Sell shares of the business to partners for cash to offer during negotiations.
- Agree to pay one’s ex the value of his or her share of the business in installments over time.
- Sell the business and divide the profits with the spouse.
The last options may be the one most Pennsylvania business owners want to avoid, but with quality legal advice, they may learn of additional options for protecting their interests in a high-asset divorce.
