If you are one of the many Alabama residents who owns a business, chances are you want to do everything in your power to protect it from harm. This not only means that you need to take steps to shield it against potential litigation, you also need to shelter it from any fallout that may accompany changes in your personal life — such as getting a divorce.
As Alabama is an equitable distribution state, each spouse should walk away from the union having achieved a fair division of assets. Your business may be your biggest asset, and it may be subject to division, which could spell trouble for your bottom line.
How can I protect my business?
There may be several things you can do long before divorce enters the picture. For instance, if you started your business before getting married, you can utilize a prenuptial agreement to protect any future earnings and growth of this separate property. If you start a business after getting married, a postnuptial agreement may offer many of the same protections if written properly. Other things you can do include:
- Pay yourself and do not reinvest that money into the business
- Add divorce provisions in business contracts
- Keep your home and work life separate
Co-mingling personal and work assets can be a big problem. If you are diligent in keeping everything separate, if will be easier for you to claim that your business is separate property and not subject to division if you get a divorce.
What happens if the court considers the business to be marital property?
Sometimes, even after your best efforts to keep your business separate, this happens. If it does, both you and your spouse will have a lot of decisions to make. Will you keep the business? Will you buy out your spouse’s share? Will you run the business as partners?
You have options, and you will just need to weigh the pros and cons of each to figure out which you feel is best for you and your company.
Divorce can hurt your business if you do not put the proper protections in place. An experienced family law attorney can help you create prenuptial or postnuptial agreements which can offer the protections needed in the event your union fails to thrive. If you are already going through the dissolution process and safeguards were not put in place beforehand, your attorney can assist you in doing everything possible to help you achieve a fair and balanced settlement that has as little impact as possible on your company.