For Massachusetts business owners, divorce can lead to a huge shift in not only one's personal life, but also in the structure of their business venture. Many spouses are fearful of sustaining devastating losses as a result of their divorce, and are eager to find a strategy that can protect their business interests. In some cases, a spouse is able to retain their business, but only by giving up virtually all of their other assets in the process.
When a couple is faced with dividing the value of a business, the first step involves determining what that value may be. In some cases this is a relatively simple procedure; other businesses are far more complex and require the services of multiple professionals in order to reach a final value. For example, a real estate firm might be valued based on the real property where the office itself is located, as well as the value of the current listings and established client list. That is before assessing the value of equipment, websites and so on.
Once a value has been determined, the couple must decide how to allocate that value. When one party wishes to retain the business, he or she must offer the other an array of assets that equal his or her fair share of the assessed value. In some cases, there are simply not enough non-business assets to make such allocation possible. At that point, the only real option is to sell the business and divide the proceeds.
For those in Massachusetts who cannot stomach the thought of losing their business in this manner, it is important to take a proactive approach to the matter. Once a couple is married, the only way to protect a business from the property division process is to draft a postnuptial agreement that outlines how the entity is to be treated in the event of a divorce. Doing so can help business owners ensure that the hard work and passion poured into building a successful business is not lost if one's marriage comes to an end.
Source: Huffington Post, How To Raise A Daughter With High Self-Esteem Post-Divorce, Terry Gaspard, Dec. 25, 2013