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Should You Stay Married to Protect Your Business?

Divorce has gotten a bad reputation not only because it means legalizing a couple’s separation but also because it is expensive and, at times, unnecessary. A lot of couples have actually forgone the idea of a divorce because they find it too cumbersome. Why will they spend thousands of dollars on divorce when they can agree to separate and date other people instead? However, the problem arises when there are finances involved in this decision.

Sure, it’s easy to separate bank accounts, savings, and even monthly expenses, but what about the business that you co-own? What will happen to the business now that you are no longer together? In hindsight, you should’ve clearly defined the limitations of the ownership of the business. If you are the one working on the business and your ex-spouse is simply an investor, then why should you lose a portion of it when you separate?

But alas, such are the drawbacks of a divorce. Without a prenuptial agreement, even the most seasoned divorce attorneys will tell you that it’s almost impossible to get the bulk of the business and not lose other assets. This is why couples who are also business owners simply choose to remain married. The process of divorce is too much for them.

Things Can Get More Complicated

Before you decide on not divorcing, consult with a lawyer first. Things can get more complicated when you don’t legalize your separation. For one, you still have to file your taxes together. You are still the beneficiaries of each other’s private and public insurance funds. When you don’t divide your assets, you will share in each other’s profits. That will eat up the money of the person who is earning more.

While you may decide to remain friends, it doesn’t always work well when you begin to discuss finances. No one wants to share their money with someone who is technically not involved with them anymore. So, instead of neglecting the idea of divorce, think of a way how you can divide your assets fairly, not pay hefty divorce fees, and still remain friends.

Negotiate Outside of Court

two wooden figures that has a sad expression

Divorce proceedings are more expensive when they go to court. If you and your ex-spouse can talk amicably about the division of assets (and even liabilities), then you can negotiate outside of court. You won’t need to spend so much on the proceedings and even the lawyer’s fee. However, it takes a certain level of maturity to divide the assets without the court’s interference. In most cases, both partners will want a chunk of the business because it’s a continuously profiting one.

The problem is when only one of the spouses actually worked every day for the business while the other one is a mere investor. This is why it’s essential to clear these things before entering any business venture with your partner. Although no married couple wants to think about the breakup of their marriage in the future, it’s a practical discussion to have when there’s a business involved.

So what should you do if you no longer want to stay married to your spouse who is also your business partner? Why not fire your spouse? The longer your spouse stays as a partner in business, the better their attorney’s case will be in persuading the court to see that your spouse helped build the organization. How can you dispute that if you stayed married way after you separated?

Of course, you don’t want to argue with your spouse. Firing them might be the beginning of World War 3. The best way to do this is to sacrifice other assets. Meaning, if you have other joint assets, be prepared to lose those. You will not get your mansion, but you will get a chunk of the business. Or you will lose your dream car, but you will get the business in full. Isn’t that a good deal?

Remember to always get a fair valuation of your assets before you enter any transactions with your ex-spouse. Your attorney should guide you through this complex web of divorce and assets division. If you need to let go of more assets to own your business, consider that decision because you might be on the losing end.

Many couples, especially those who remain friends, do well remaining married for the rest of their lives even though they date other people already. It’s normal for ex-couples to think in practical terms when money is involved. However, with a business on the line, consider all factors first before deciding to forego the chance for a divorce.

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