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Smart Divorce Network > Divorce > Is Your Business Protected In The Event Of A Divorce?
Divorce

Is Your Business Protected In The Event Of A Divorce?

SDN Developer
By SDN Developer
Published January 25, 2017
Last updated: January 14, 2025
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4 Min Read

For business owners, there are few worse scenarios imaginable than a divorce. Going through the process of a separation and divorce is difficult enough on its own, but the added stress of protecting or dividing up a business can make this much more difficult. When a business owner goes through a divorce, the business itself comes under scrutiny.

Contents
When did you start the business?Is there a co-owner?Is your business in your will?Are you business and private assets mixed?Be clear about your spouse’s contribution

It stops being a day job and becomes an asset. Suddenly, there are more eyes than usual on your business affairs, digging around to find out how much money the business makes, if it’s making enough money and if there are streamlining processes that would allow the business to make more money. The reason? As soon as divorce proceedings start, the business becomes an asset. Even the most amicable divorce can quickly become ugly and drawn out, so it makes sense to be one step ahead in order to protect the business you have worked hard to build.

In order to protect your business and prevent it from folding in the process of a divorce, it’s important to get your case in order early on. By presenting your case to the other side, this will allow you to guide the process rather than being in a position of reacting and defending. Getting expert advice as soon as possible is essential, as each case will be different. In order to guide you, consider these wider principles in order to protect your business.

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When did you start the business?

If the business was founded before you were married, you may be able to make the case that it is a non matrimonial asset. The mistake many business owners then make is to bring their spouses on board as directors after they are married, which makes the process of determining their contribution all the more difficult. While bringing your spouse on board in a business isn’t a mistake in itself, it can make it more difficult to manage during divorce.

Is there a co-owner?

If you are the sole owner of a business, then the courts will treat the business very different than if there are multiple owners. If you have a business partner, this will be invaluable to ensuring your business isn’t considered as a whole in divorce proceedings.

Is your business in your will?

If you plan to pass the business on to your children when you retire, then this will be treated very different by the courts, and potentially by your spouse. If you’re unsure if your will is up-to-date, there are probate solicitors who will be able to assist you.

Are you business and private assets mixed?

Mixing your private and business assets should be avoided at all costs. This is something that may not be preventable at the later stages, so it makes good business sense to make this a rule from the beginning. If your family home has been used to secure funding for the business, this might prove problematic during a divorce.

Be clear about your spouse’s contribution

If your spouse contributed to the business in the earlier days, be clear and honest about their contribution early on. If their claim is over exaggerated, then your clear and concise interpretation of their contribution will help to provide context.

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SDN Developer
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