How To Protect Your Business In A Divorce

October 1, 2019 O'Connor Family Law Divorce

After dedicating countless hours and resources to your business, the last thing you want is for a tricky divorce to end in your ex-spouse obtaining ownership of your most important and valuable asset. Whether the business was started before or during your marriage, a divorce can have a significant impact on your business or the settlement you receive or have to pay out.

We know how much work you have put into building your business and how important it is that you can take care of your livelihood and legacy. While obtaining the legal counsel of an attorney familiar with business ownership will be beneficial, there are also steps you can start on your own to safeguard your business and other important assets during a divorce.


While this is generally not seen as the most romantic way to begin your marriage, it could help protect you and your established business in the event of a divorce in the future. A strong prenuptial agreement can outline what components of a business, if any component at all, will be considered as marital property. This can highlight the parts of your business your spouse may be entitled to and what they have no claims over.

However, if your business was started during your marriage, it likely was not covered in a prenup. In this case, the use of a postnuptial agreement can help you specify whether or not the business is your separate property, how debts from the business will be dealt with, and any other business-related arrangements. A postnup is very similar to a prenup, but is contracted during the marriage instead of before it begins.

By taking the time to draft these types of agreements before a divorce occurs, you can set up a useful legal framework to protect your business from a significant and severe asset divisions that could occur within your divorce and leave your business crippled.


If how much your business is worth is a point of contention in your divorce, you will likely want to move forward with having a business valuation conducted. This can be an expensive aspect of a divorce; however, if your spouse wants half of a business she is claiming is valued at $5 million and the business valuation shows that, without you, there is not much value to your business and gives you a value of $3 million instead, you have just saved quite a bit of money in both a possible settlement as well as in paying the attorneys to fight about the value.


If it is important for you to retain 100% ownership of your business, you may have to sacrifice other marital assets in order to do this. Most states try to equitably split assets from within a marriage, including your business, so it is important to prioritize what is most important for you to hold onto.

If you want to be the sole owner of the business or prevent your partner from having any share or value from the business after your divorce, you may need to make sacrifices. By fighting less over property like the marital home, investments, collectibles, vehicles, and other assets of monetary value to your spouse, you might increase your chance of leaving the divorce with your business by trading other assets for it.


If other options do not work and you are unable to protect your business from your spouse and the divorce proceedings, your final option could be to buy out your spouse from the business. Just like if your spouse was a business partner if you purchase all their shares you could ensure that you retain ownership of the company.

While it may seem expensive or unaffordable, there are ways to achieve this such as selling minority stakes to your employees, selling other assets from within the marriage, or you can gather the necessary funds through loans or borrowing. Sometimes you can set up a payment plan so you do not have to come up with a lump sum payment.


If you are considering a divorce or are in the middle of a divorce and your business is at risk, one of our knowledgeable divorce attorneys could help analyze the factors that could influence the best way for you to fight for your business during a divorce.

Our lawyers at O’Connor Family Law have experience dealing with difficult and complex divorces involving businesses and could help you prioritize and fight for what is most important to you. Whether you want to sit down to obtain a legal consultation or you are ready to have a compassionate yet fierce attorney by your side throughout the process of your divorce, reach out to our experienced legal team today to get the representation you need.