During a divorce, even a seemingly non-contentious one, it can be common to overlook protection of assets. This includes companies owned by one or both of the spouses. Consequently, it's essential for Virginia executives who control at least one business to make sure that a divorce doesn't derail the smooth operations of the organization.
There are numerous ways to protect a business from a messy divorce. The first is through a prenuptial agreement, which is a preventive arrangement between the two parties that is executed prior to the date of their marriage. If there is no prenuptial, it may be possible to set up something called a DAPT, which stands for "domestic asset protection trust." It gives ownership of the company to a trust, which can be beneficial if it seems as if the business could become a victim of the divorce. While not guaranteed to save the business entity, it can be a wise measure in some cases.
Another method of business protection during divorce is to make sure all finances that are company-related are kept separate from those that are personal. In this same vein, if a spouse doesn't work at a company, he or she should have no financial or legal relationship to that company. On the other hand, if a spouse is part of the business, an agreement for one party to buy out the other can be a wise method of maintaining the integrity of the organization without allowing it to fall victim to the divorce.
It's rarely too late to shield a Virginia based business from the possibility of fallout from divorce. The key is to start planning how to guard the company at the first realization that divorce is a possibility, if not before. This can be accomplished with the help of financial and legal representation.
Source: tech.co, "10 Rules All Entrepreneurs Must Follow to Divorce-Proof Their Business Financially", Zach Schleien, Dec. 27, 2014