Couples enter into marriage with a sense of a hope for the future. However, about 50% of marriages unfortunately end in divorce. The ending of a marriage can be especially complicated if the divorcing couple own a business together. This is why it’s important for couples to protect their companies against divorce. If you live in South Carolina, here are some essential tips to keep in mind to keep your finances intact.
Document everything early
If your business is set up as a partnership, an LLC, or a corporation, and you are not the sole owner, you could face some financial issues in the future. Even if your estranged spouse stayed home and raised the children, they are still entitled to a share of your company, and are often awarded half of what you own. It’s best to set up an operating agreement that will include provisions to protect your interest if you get a divorce. These agreements prevent interests from being transferred without approval from all of the other owners of the company.
Prenuptial and post-nuptial agreements
A couple decides what portion of their company will be marital property and which parts will be separate property in a prenuptial agreement. This can be particularly important when you have started operating your business before the marriage. If that is the case, you might want to include a provision that even the appreciation in the company’s value after you got married will still be considered your own separate property in the event you divorce.
A postnuptial agreement works similarly but helps couples decide how the company will be divided in the event that they did not have a prenuptial agreement in place before tying the knot.