No one gets married planning for a divorce. Still, you should have a plan to protect your New Jersey business if you ever divorce your partner.
What does protecting your assets mean?
Protecting your assets does not mean that you should try to hide or steal assets from your partner. Rather, it means that you should put protections in place to ensure that you get what you are legally entitled to in the event of divorce. You can put protections in place with a mutually beneficial business contract or other means.
What happens if you go the contract route?
If you choose to go the contract route, you are signing a legal document, such as a prenuptial or postnuptial agreement, to help with a resolution that is satisfactory for both parties. It’s good to have a contract in place because once one person files for a divorce, emotions stir and could make coming to a fair agreement more challenging.
An example of an effective contract would be one where your business gets listed as a separate property. This way, you do not have to come up with the monetary value of everything in the business in order to divide it between the two of you.
What happens if you and your partner decide on not getting a contract?
Should you and your partner decide on forgoing a contract, there are still a few steps you can take to ensure that your assets get divided fairly. An example of a step you can take is keeping clear financial records so that it is obvious what is and is not part of marital assets. An alternative to this is to have personal and business-related expenses kept in separate accounts. Following these steps helps prevent family law battles.
Having systems in place can help give you peace of mind if the unexpected happens. If you are trying to set up a business that you wouldn’t want to lose to your spouse in the event of a divorce, you may want to draw up a prenuptial or postnuptial agreement with the help of a trusted advisor.