If you're getting a divorce and you also own a business, you're probably concerned about how assets will be distributed. Fortunately, there are certain steps Washington business owners can take to ensure their enterprise is safeguarded, both before and during a marriage. Inc. explains a few of these options and how they can benefit you.
The best protection for your business is to have a premarital agreement in place before you get married. A premarital agreement states which assets you own going into a marriage and can even include a clause that states your spouse has waived any rights to the enterprise. While many people shy away from making premarital agreements, they are a must for entrepreneurs.
Minimize your spouse's involvement
In the event you started your business after you were already married, you'll need to take a different approach. First and foremost, make sure your business's finances are kept separate from personal finances. Also, try to limit your spouse's involvement in daily operations. If he or she can show involvement on the management level, or even just regular assistance, there is a greater chance that a court will consider the business marital property.
Value your business correctly
In some cases, the court may determine that the proceeds of your business must be split. This requires a valuation of your business, which is how much it's worth. There are different approaches you can take towards the valuation. For instance, the market valuation is how much the business would command on the open market if it were sold. This number is usually much higher than the book value, which is tallies up the business's actual worth. Your attorney can explain the best method for valuing your particular business.