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Planning ahead for divorce as a business owner

Business owners in Maryland may need to consider the future when they decide to marry. While few people want to think about divorce before they even begin their married life, this is a necessity for entrepreneurs. In many cases, investors like venture capitalists may even require proof that a business is safeguarded in case of divorce before making a serious investment in a firm. Because a business can be such a key asset, it's important to think about how a divorce could affect its future.

In many cases, both spouses are very involved in a business. Therefore, protection should not be designed to strip legitimate rights from one spouse. By developing an agreement on how to handle the business, both spouses can protect their interests as well as the viability of the company. One mechanism that a couple can use is a prenuptial agreement. If a spouse starts a business after marriage, they may want to consider a postnuptial agreement on the enterprise.

If the business is mostly one spouse's project, a prenup or postnup might specify that it is to be considered separate property in case of divorce. In some cases, it might recognize growth in value as a marital asset, but an agreement could mandate a cash payout or a specific percentage interest in the business rather than dividing the company itself. When both spouses are fully involved, a prenup could spell out how a buyout would work during a divorce.

While divorce almost always presents major financial concerns, it can be especially complicated for business owners. A family law attorney could provide advice, guidance and representation to help entrepreneurs reach a fair settlement on property division and other divorce legal matters.

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