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Protecting a business from a divorce

On Behalf of | Apr 5, 2021 | Divorce |

Unfortunately, not every Westchester couple’s marriage will last forever. If a divorce appears to be on the horizon, asset division can be one of the most contentious issues to work through. If one spouse owns a business, they probably want to know how they can protect their business from a divorce.


A business owner can create a prenuptial agreement or postnuptial agreement that spells out important matters regarding the business in the event of a divorce. These may include:

  • The business is a separate property and not subject to division in a divorce.
  • Any value added to the business can be considered marital property. There can be a limit as to what percentage the spouse will receive of the business’s value accumulated during the marriage.
  • If the business is an equal partnership, which spouse would buy out the other spouse. Or if the couple will continue to jointly own the business.

No contract

If a business owner does not have a prenuptial or postnuptial agreement there are steps they can still take to protect their business.

  • Establish themselves as the sole owner of the business. The organizing documents for the business should state it can’t be divided in the event of a divorce.
  • There should be clear records of the source of the capital for the business.
  • Business and personal expenses need to be kept separate.
  • If a business uses cash, the cash transactions should be well-documented.
  • If a spouse works at the business, it is important that they receive a market rate salary.

An attorney who specializes in high asset divorce understands the complexities that a divorce can cause a business owner. They can advise their client on their options while making sure their business is protected for many years to come.