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Protecting your business in a divorce means planning early

No one gets married planning to divorce in the future. In the days leading up to your wedding and during the honeymoon, most people do not think about what happens if happily-ever-after ends up involving divorce attorneys and a courtroom. However, as a business owner the possibility of divorce is something you should consider before you tie the knot.

In terms of protecting your business, the earlier you start planning, the better. The last thing you want is to watch all your years of hard work evaporate in a divorce settlement. Whether you are already married or planning to get married, a marital agreement will go far to help you keep your business operational. A buy-sell agreement might also be an option for you. No matter which strategy you choose, an experienced divorce attorney in the Utica area can help you protect your assets in case of divorce.

Prenuptial agreements

Bringing the subject of prenuptial agreement to your future spouse may be an uncomfortable idea. However, losing your medical practice may be even more uncomfortable. Your prenuptial agreement should make sense and be fair to both you and your future spouse. It should also contain two things: a strategy for valuing the business assets and a fair financial settlement that does not include an ownership interest.

Postnuptial agreements

A postnuptial agreement works very similar to a prenuptial agreement. The main difference is that you enter into the postnuptial contract after you are married. IT should contain similar provisions, including an agreed upon method for valuing the business and what she will receive if you divorce. If you have incorporated your practice, your postnuptial should contain specifics regarding the ownership of corporate stock. If the business is your primary focus, you may want to consider leaving out other marital assets. Use the prenuptial agreement to protect your practice and let the court handle the division of your other assets.

Buy-sell agreements

If a prenuptial or postnuptial agreement is too difficult to manage, you should consider putting a buy-sell agreement in place. Such an agreement will provide you the opportunity buy back any stock your ex-wife receives as part of the divorce settlement. Just like the prenuptial and postnuptial, the buy-sell agreement should also contain provisions describing the valuation method and a payment plan for the buy-out.

Whether you are thinking about getting married or divorce is already on the horizon, it is important to take steps to insulate your business as much as possible.

Source: Nov. 30, -0001

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