Protecting Your Business During a Divorce

At Von Esch Law Group, we understand that navigating a divorce is a challenging and emotional journey, especially when a business is involved. Your business, often one of your most valuable assets, needs special consideration to ensure its protection and continuity. Here are essential strategies to safeguard your business during a divorce, curated by our experienced legal team.

Understand Your Business Structure

The structure of your business—whether it’s a sole proprietorship, partnership, LLC, or corporation—can impact how it is treated during a divorce. For instance, corporations and LLCs may offer more protection against personal liability and may complicate the division of business assets. Knowing your business structure will help you and your attorney navigate the legal complexities.

Get a Professional Business Valuation

An accurate business valuation is crucial during divorce proceedings. Hire a professional appraiser to assess your business’s worth. This valuation will provide a clear picture of your business’s financial standing and can be used to negotiate a fair settlement. Ensure the appraiser is neutral and experienced in handling divorce-related valuations.

Keep Personal and Business Finances Separate

Maintaining a clear distinction between personal and business finances is essential. Commingling funds can complicate the division process and make it harder to prove the business’s value. Use separate bank accounts and credit cards for business transactions and keep detailed records of all business activities.

Consider a Prenuptial or Postnuptial Agreement

If you’re not yet married, consider a prenuptial agreement that outlines how business assets will be handled in case of a divorce. If you’re already married, a postnuptial agreement can serve a similar purpose. These agreements can specify that the business remains separate property and establish how its value will be addressed.

Limit Spousal Involvement in the Business

If possible, avoid giving your spouse a significant role in the business. Their involvement can complicate matters, especially if they have an official title or significant responsibilities. This can lead to claims of ownership or contributions to the business’s success, which can affect the division of assets.

Pay Yourself a Competitive Salary

Paying yourself a competitive salary ensures that business profits are not artificially inflated. If your salary is too low, it could appear that your business is more profitable than it actually is, which could affect the division of assets. A fair salary reflects the true financial health of your business.

Negotiate a Settlement

Negotiating a settlement can be a less adversarial way to resolve business-related issues in a divorce. Work with your attorney to propose a fair buyout or trade-off for other assets. This can help you retain full ownership of the business while ensuring your spouse receives a fair share of the marital assets.

Buy Out Your Spouse’s Share

If your spouse is entitled to a portion of the business, consider buying out their share. This can be done through a lump sum payment, installment payments, or by trading other marital assets. A buyout can provide clarity and help maintain business continuity.

Review Shareholder Agreements

If your business has multiple shareholders, review any existing shareholder agreements. These agreements often contain clauses related to divorce, such as restrictions on transferring shares to a spouse or requirements for buying out a divorcing partner’s shares. Ensure your agreements are up-to-date and provide adequate protection.

Seek Professional Legal and Financial Advice

Navigating a divorce while protecting your business requires expert advice. Consult with a family law attorney who has experience with business assets, as well as a financial advisor who understands the complexities of business valuation and asset division. Their expertise can help you make informed decisions and safeguard your business interests.


Divorce can pose significant challenges to business owners, but with proactive steps and professional guidance, you can protect your business and ensure its future success. Understanding your business structure, obtaining a professional valuation, keeping finances separate, and considering legal agreements are crucial strategies. By taking these measures, you can navigate the divorce process with greater confidence and maintain the stability of your business.

Contact Us

If you have questions about alimony or need assistance with your divorce proceedings, please reach out to us. Schedule a consultation with one of our experienced family law attorneys to discuss your case and explore your options.

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