We are women — intuitive, giving, and full of faith. We are also CEOs of our lives and businesses, and I’d like you to wear that hat as you read this article.
As you likely know, more than half of all marriages end in divorce. As much as we don’t want to think about that possibility when we are entering or living in wedded bliss, it’s extremely important to consider the implications for yourself and your business.
Because several of my clients whom I mentor have had to handle this situation, I thought it would be a good idea to review your options as a business owner to protect yourself and everything you’ve worked so hard for.
Here are a few tips we gathered from Certified Divorce Financial Analyst, Jeffrey Landers, and it includes advice for BOTH married and single women. So get reading and remember ladies, this isn’t personal… it’s business!
If You Are Hitched…
Once you get married, property divisions can get very blurred, especially if you pour your assets into joint agreements with your hubby. So, if you re-title your separately owned condo by adding your husband as a co-owner, or if you deposit your inheritance into a joint account then that property will likely now be considered “marital property”.
Other examples of marital property include: 401Ks, IRAs, stock options, bonuses, commissions, brokerage accounts, bank accounts, professional practices and licenses, limited partnerships, tax refunds and a lot more.
Something else to know is this: In many states, if your spouse helps you out in your business — whether he joins you for client dinners, gives you ideas and advice, even watches the kids so you can work — and his efforts help your business grow, that increase in growth can be considered marital property. So, it’s very important that you understand what marital property you share with your spouse, and what you own separately.
Options for Married Women:
1. Get a buy-sell agreement in place.
Every business with two or more owners should get one drafted immediately. This contract will determine the terms and conditions when a transfer of ownership in the business takes place in the event of divorce, death, disability and other “triggering” events.
2. Sign a post-nuptial agreement.
A post-nuptial agreement is a contract between spouses. It’s like a prenup, but it’s for AFTER you are married. Postnups contain the same elements as a prenup, but they are often challenged and invalidated a lot more frequently than prenups, because once you are married to someone, you theoretically have less bargaining power.
Think about it this way, when you are engaged or single, you can walk away from the contract if you don’t like the terms of a prenup. Neither party has any legal family law rights on the other. But, when you’re married, under the law, you now have very well defined legal rights as a “couple” and not as an individual, so it’s likely each of you will have to compromise on distribution of property.
If You’re Single or Engaged…
Whether you still log in daily to Match.com, or are regularly dropping hints to your man about that princess-cut diamond ring you saw at Tiffany’s, you’re actually in the BEST position to safeguard your assets. Your property is still completely yours. And, if you’re engaged and are absolutely against prenups, well, you don’t have to go that route if you really don’t want to. Here’s how…
The Single Girl’s Best Friend: A domestic (or foreign) asset protection trust.
With this trust, you transfer the ownership of your separate property, your car, your condo, your shoe collection, and your business, into a trust. This actually means that the trust, and not you, will now legally own your separate property, but it also means that your business, and any appreciation on your business, remains OUTSIDE of your marriage.
This option works for C corporations, limited liability companies, limited partnerships, but NOT for S corporations. Talk to a trust attorney to find out what you need to do to get this set up.
By now, “prenup” is as much a part of our vocabulary as the word “honeymoon”, so remember that this option is always available to you once you get engaged. Just make sure you visit this topic way before you get married. You want to be thinking with your business hat on and give yourself time to prepare for anything.
Of course this article is just a starting point. Talk with your attorney about your personal options when it comes to better understanding and protecting your property. And to learn more about our featured expert Jeff Landers, visit his site www.bedrockdivorce.com.
© 2010 Ali International, LLC
Self-made entrepreneur and Inc. 500-ranked CEO, Ali Brown, teaches women around the world how to start and grow profitable businesses that make a positive impact. Get her FREE weekly articles and advice at www.AliBrown.com
Photo source mzacha
Powered by Facebook Comments