About half of American marriages end in divorce. People in Illinois may understand how disruptive a divorce can be for someone’s personal life as divorce can mean moving, letting go of assets and even seeing children less frequently. What many people don’t understand is that divorce can have serious impacts on an individual’s business, too. This is particularly true for entrepreneurs and executives.
How divorce can interfere with business
One of the main reasons that divorce can impact a business is the division of assets. This may mean parting with a lot of stock and handing it over to an ex-spouse. In practical terms, this can essentially make a former couple business partners.
Buying an ex-spouse out can be a great way to handle this kind of situation. Sometimes, even walking away from the business can be prudent. Officers in companies who are partly compensated in stock should be particularly aware of this possible complication.
When one or both of the spouses works for a family business, managing the business can start to become a challenge. Again, one of the best ways to handle this is for one person to buy the other’s share or to sell the business to an outsider.
Anyone who owns a business prior to marrying should strongly consider a prenuptial agreement. That may not sound romantic, but it’s always a good idea for couples to think about how to work problems out while they still like each other.
Entrepreneurs may think about talking to a family law attorney before getting married. They might discuss the structure of their company, how it would be affected by divorce and ways to separate personal and business assets. Planning up front can be much less expensive than leaving these things to chance.
