When Ohio entrepreneurs get together to form a business, they may not be thinking about one another’s personal lives, but doing so may be necessary to protect the company. If one business partner gets a divorce, the company could come into play during the property division stage of the proceedings.
The spouse of the partner who is divorcing may be able to claim half of the partner’s share of the business. This is even more likely if the business was formed after the marriage. Prior to getting married, partners may want to consider having prenuptial agreements that address what will happen to the business in case of divorce. Post-nuptial agreements are much more vulnerable in court proceedings, so it is important to do this before the wedding.
Even prenuptial agreements are not guaranteed. In addition, there should be a buy-sell agreement in place. This allows the option of purchasing the divorced spouse’s portion of the business along with a list of terms and conditions. The spouse who is not involved in the business should agree with any of these contingency plans in writing. Despite these preparations, business partners of people going through a divorce should prepare themselves for the possibility that the company may suffer during the upheaval.
People should also be aware that assets such as the retirement account may be up for division even if only one spouse contributed to it. What is divided and how all depends on what a court determines to be marital or individual property. A couple may also decide to negotiate property division themselves although it still must be approved by a judge. One advantage of a couple working together with their respective attorneys to negotiate this property division is that it gives them more control over the agreement than litigation might.