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How to protect business assets from a divorce

When you get married it is normal not to think about divorce or business assets. Unfortunately, over 50% of marriages will end in divorce. Statistics even go up to 60% when referring to following marriages. Divorces will be really difficult to deal with but if you have a business, everything becomes even more complicated. The business is most likely the financial asset of the highest value you own. You can be sure that during your divorce the spouse will be interested in getting a part of the business. Protecting business assets is really important.
Keep in mind that the spouse can be entitled to up to 50% of the business as the divorce takes place. This is definitely a large part of your overall assets. The big problem is that most of the protective methods you can take advantage of will need to be applied before the divorce starts. The prenuptial agreement is obviously the highest protection you can have for yourself. That document should always be signed before a wedding is officiated for it to be completely useful.

Separate versus marital property

When looking at separate properties we normally refer to:
  • Property in the ownership of a spouse before the marriage.
  • Inheritance received by only one of the spouses.
  • Gifts received from third parties.
  • Suffering and pain part of the personal injury claim.
All separate property loses the status when commingled or mixed with property that is labelled as marital. This practically means everything else. As an example, if an apartment you had before the wedding is retitled, the spouse will receive part of it during the divorce.

To keep it as simple as possible, marital property will be made out of absolutely all assets and income that is acquired by a spouse during the marriage. This includes everything from the IRAs and pension plans to life insurance and mutual funds.

Postnuptial and prenuptial agreements

The prenuptial agreement is a special contract that will be signed by both spouses before a wedding. This document details property rights and the expectations that need to be discussed after the divorce. No matter how we look at things, the prenup that is well drafted will override everything else. It is really important to have the document drafted by an experienced attorney so that as much protection as possible is gained. Although it may seem weird, both spouses can have attorneys discuss the terms for everyone to be happy. The prenuptial agreement should be drafted based on the following, among others:
  • Everything should be put in writing.
  • The agreement has to be voluntarily executed.
  • Full disclosure is needed – this means no property should be hidden or the prenup will be invalidated.
  • The contract needs to be executed by the two future spouses in front of notaries or witnesses.
In the event the prenup agreement is not available, a postnuptial agreement can be drafted. Attorneys help in this case since there will be some things that cannot be added after the marriage happened. Be sure that you are careful since making mistakes means that you lose a large part of the property, even if you built it before the marriage happened.

11 Apr 2017 10:59


About Boris Dzhingarov

Boris Dzhingarov graduated UNWE with a major in marketing. He is the CEO of ESBO ltd brand mentioning agency. He writes for several online sites such as,,, Boris is the founder of and