Marriage is a big decision. As exciting as it is to start a life with someone, it is also scary, particularly if you have a business or other assets you are concerned about losing ownership of by entering into a marriage or if it does not work out. For those who have invested money and years into building businesses, it can create a great amount of anxiety not knowing how a marriage could impact their ownership of it. Luckily, you do not have to choose.
There are a number of ways to keep your business safe when entering into a marriage, and by doing your research and consulting with an attorney, you can ensure that you are able to love your spouse free of concern for how it could affect your business.
When Did You Form the Business?
One thing that it helps to understand is that when you divorce, you are only at risk of losing or dividing marital assets. Generally, marital assets are assets that were acquired during the course of the marriage. For these purposes, businesses are also considered assets. This means that if you started a business during your marriage, it (as well as its debts, value, and profits) would be treated as a marital asset. This is true unless other legal actions were taken to ensure the business would not be treated as such.
However, if you formed your business prior to entering into your marriage, it may not even be considered a marital asset. There are some situations where it still could be, such as if your spouse helped to run it, or you used personal money from your marriage for the business, or vice versa. However, when the business was formed will be highly relevant in determining its status as a shared or unshared asset.
How Forming an LLC Business Can Protect You During a Divorce
By forming an LLC, you are taking your business and giving it a legal identity separate from yours. In combination with other actions, this can allow you to demonstrate an intent that the business is not a marital asset. This action of forming an LLC is particularly important if the business is created during the course of marriage since any business formed during the course of a marriage will essentially be presumed to be marital property.
This means the burden will be on you to demonstrate that the business was not a marital asset. This can be done by showing that you formed a separate LLC, did not involve your spouse in your business, and did not use marital assets or income to pay for the business. In other words, you are demonstrating that your business was separate from your marriage.
Contact a Smart Business Law Attorney in Missouri
If you want to ensure that your business and assets are protected, regardless of your marital status, the experienced business law attorneys at Johnson Law Firm can help. Contact us today to schedule a consultation.