Business owners in Maryland know exactly how hard it can be to take a concept and mold it into a successful venture. Many have put in a great deal of money, time and effort to get their businesses off the ground, and then to weather changing market conditions and an economic recession. To have a huge portion of that hard work be lost through the property division portion of a divorce is a difficult prospect to consider, but one that any entrepreneur should think carefully about.
Of all available options, having one's partner sign a carefully drafted prenuptial or postnuptial agreement is the strongest means of protection. Absent that, the next best option is to create a domestic asset protection trust. Known as a DAPT, this type of trust creates a clear delineation between business finances and those within the home. By keeping all business assets held within a DAPT, it is possible to shield those funds and property from division during a divorce. Each situation is unique, and spouses should consult with an attorney to find the right level of protection for their specific circumstances.
When there is no protective measures in place, spouses should be prepared to buy out their partner's "share" of the business. This can be accomplished in a lump sum payment, but is more commonly handled through by giving one's spouse a greater share of other assets within the divorce. This can mean walking away from one's home, vehicles and other forms of property in order to keep the business intact.
For many in Maryland, keeping a business operational and thriving throughout the divorce process is the top priority. This goal can be met with the proper planning, but is also attainable through a carefully structured negotiation strategy. In business matters, having a plan in place before it is needed is the key to a favorable outcome. The same can be said of the property division portion of a divorce.
Source: tech.co, "10 Rules All Entrepreneurs Must Follow to Divorce-Proof Their Business Financially", Zach Schleien, Dec. 27, 2015