The complications of owning a business while seeking a divorce

| Nov 7, 2019 | divorce

Many people in Missouri work hard to build successful businesses. Often simultaneously, they are building their lives with their spouse and children. In some cases, they may not fully realize what impact a divorce can have on a business in the event the marriage should end.

As part of the asset division portion of a divorce, the other spouse may be entitled to a portion of the business. Unfortunately, this could leave the business in jeopardy or put owners in a position where they must make decisions regarding the company with a former spouse. For example, two business owners claim that when their third partner was going through a divorce, they borrowed $250,000 to buy his portion; because it was a relatively new business, they were forced to guarantee the loans personally.

In another case, a woman ultimately ended up signing her business over to her husband over concerns that she would not be able to afford child support in addition to her personal expenses. Another owner describes how the stress he experienced after he borrowed money to pay his divorce settlement. This stress damaged his personal and professional relationships in the aftermath of his divorce.

Fortunately, there are steps a person can take to protect their interests in a business. Many business owners will create a plan that describes the process for how other business owners will buy out a partner who is going through a divorce. Some tools, such as a prenuptial agreement, can put provisions in place that will ensure that the end of a marriage in Missouri will not jeopardize the overall success of a business.