Protecting your small business during an Ohio divorce
You spent a good portion of your funds, time and energy building your small business. Now divorce looms and you worry that your spouse will take part or all of the enterprise you worked so hard to make successful.
Ohio follows an equitable, or fair, distribution process, which means your business may be subject to division. However, you have options to protect it.
Engage in open and honest conversations with your spouse about your business. Share financial information and be transparent about the business’s value. Consider hiring a professional appraiser to obtain a clearer picture of its worth. Clear communication can help build trust and potentially lead to more amicable negotiations.
Before marriage, ways you can protect your business include using specific business structures, planning to keep marital and business finances separate or creating a prenuptial agreement. If you had a prenuptial agreement that addressed the business, ensure it is upheld during the divorce proceedings. The same applies to a post-nuptial agreement, which you create during the marriage but can also serve to protect your business.
If the judge deems your business a marital asset, consider offering your spouse alternative compensation. For instance, you can propose your spouse receive a larger share of other marital assets or alimony in exchange for retaining full ownership. You can also try to buy out your spouse’s share of the business’s value.
According to Business Woman Media, business owners experience a higher divorce rate than other demographics, with the divorce rate ranging from 43% to 48% of business owners. Even if the business existed before marriage, it may be a marital asset if the court determines your spouse contributed to its current value either directly or indirectly during your union. Taking measures to protect it may prevent its sale and allow you to retain control.