If you own a business, you probably have concerns about whether it will survive a divorce. Does your spouse have a right to part of your business? How can you work together to ensure that you both receive a fair share while continuing to operate and protecting your livelihood?
If you live in Kentucky, consider these factors if you have separated from your spouse and you are a business owner.
Laws about property division
If you started the business during the marriage, your spouse has a right to a portion of its assets under Kentucky’s equitable property division laws. He or she can ask for part of the business in the divorce settlement even without contributing to its success. The judge will review the value of your shared marital property, how each of you contributed to acquiring that property and the future earning potential of your business.
Strategies for protection
You can prevent a divorce from putting you out of business with some simple legal protections. If you plan to get married or are already married, a prenuptial or postnuptial agreement can guide the fate of the company in a divorce. You can establish a valuation method and indicate the portion of the business each of you would receive in a divorce. The business’s bylaws or operating agreement can also cover these concerns. The court will follow the provisions of these legal documents in a divorce.
Before filing for divorce, have your business professionally valued. Doing so will give you a better idea of how much equity you could stand to lose in a divorce settlement.