According to a report conducted by the National Marriage Project at the University of Virginia, 50% of all marriages in America end in divorce. With this in mind, it is important for business owners to know how to protect their company if they are going through a divorce. If business owners aren’t careful, they can end up battling to keep their business assets from their ex-spouse. In this blog, we explain a few ways that you can protect your business in a divorce.
LLC’s & Corporations
One way to protect your business assets is to make a limited liability company. LLC’s run under an “operating agreement,” which details the ways decisions are made for the business. Assets like real estate and bank accounts can be titled in an LLC. This can potentially shield these assets from being labeled as personal assets in a divorce proceeding. LLC’s created prior to the marriage usually provide better asset protection. Creating a corporation like a c-corporation or an s-corporation is another way to protect your business assets from your spouse. A corporation is a separate legal entity from you as an individual and can hold your business assets. You should consult with a lawyer to determine what type of corporation is best for your situation.
Create A Trust
Another way to shield your assets is to make a trust. Like corporations and LLC’s, a trust is a separate legal entity that can hold your real estate and bank accounts. You can legally transfer your business assets to a trust to protect the business. Creating a trust requires proper documentation that is best handled by an experienced attorney.
Do you need help protecting your business assets from your ex-spouse? Contact our Birmingham divorce attorney to set up your free consultation today.