Many people lose their businesses when they go though a divorce in North Dakota. The businesses are looked at as assets, which means that they have to be split up between the two parties, just like homes, cash and other such things. If the business cannot actually be divided–which is the case the vast majority of the time–then it could be liquidated. This means that it will be sold off and the money will simply be split. Without enough money to buy it back, a person could be forced to start over from scratch.
Do you want to make sure that you have the rights to your business in a divorce? Do you want to protect yourself and your business in a legal sense? If so, there are a few different things that you can do.
First, you may want to think about having your spouse sign a prenuptial agreement if you already own the business when you get married. This agreement will simply need to state that you retain the rights to the company if a divorce occurs. Your spouse will not be able to claim any rights to it, so it will not be liquidated.
You may also want to make the business your legal employer, rather than something that you own. This means that you have to be paid just like any other employee instead of just taking home the total earnings each year, but it also means that your business’ full value is not going to be counted among your assets.
If it is too late to do these things, another option is to create a payment plan during the divorce. Rather than selling off the entire company and splitting the money, you simply have to agree to pay your spouse out of what the company earns over the coming years until you reach the agreed-upon value.
Source: Nashville Business Journal, “How to divorce-proof your business” Rosemary Frank, Feb. 19, 2014