Estate Planning for The Business Owner Who is Getting Separated
Business owners who are going through marital separations need to focus on division issues and property valuation that are inherent in divorce and separation. Unfortunately, there is a very real chance that the spouse can walk away with the business, much to the owner's chagrin. Here are the steps that you should take to make sure that you walk away from your marriage with your business in tact:
- Do not allow your spouse become the successor manager to your business. In your estate planning, name someone else as the successor manager, so if a divorce does occur, your soon to be ex spouse will not get a hold on your business assets.
- Do not allow your spouse to become an unintended beneficiary to your assets. Your spouse may get a minimum elective share of your assets, but you can protect your business from becoming part of this with some forethought and planning.
- Do not forget the importance of cash. Do not reinvest all of your assets into your business, if you want your assets to be protected during the divorce.
Protect your children's inheritances from their own bad marriages. Approximately 50% of marriages are ending in divorce, and the odds will not be different for your offspring. Protect them by leaving their inheritances in trusts rather than granting them to your children outright. This way, not even a future divorce can separate the inheritance from the grasp of your offspring, allowing them to be protected in ways that you may not have been able to protect yourself.
When you are a business owner facing divorce, the estate planning process can allow you to protect some of your most vital assets from being lost in the shuffle of paperwork. With a little bit of forethought and planning ahead, there is no reason why you cannot completely protect your business from your soon to be ex spouse, protecting vital assets in the process. |
