Business owners in Wisconsin may be especially concerned about the effects of a divorce on their enterprises. After all, the financial complications of the end of a marriage can persist long after the personal and emotional issues have been sorted out. With closely-held family businesses, a divorce can introduce complications, especially if both spouses have been heavily involved in the firm or if the business was started after the marriage. There are ways in which business owners can plan to protect themselves and their companies from the effects of property division.
Property division for business owners
As Wisconsin is a community property state, marital property is generally divided equally. However, there are still complications here, especially if a significant amount of family wealth is tied up in the business. A strict 50/50 distribution of the business may lead to a dysfunctional working relationship or a sale of the company, even when the owners had bigger plans or wanted to keep the business. This is one reason why many business owners, especially if they have partners or plan to bring on investors, sign prenuptial or postnuptial agreements specifying how their interests in their companies will be dealt with during a divorce.
Creative solutions for asset distribution
There are creative solutions that could result in a healthy distribution of assets during a divorce. A gradual payout system, in which a buyout from the business forms a sort of spousal support package, is one option that can balance both parties’ interests. There are other choices that can also protect the business during a fair divorce settlement.
Property division during a divorce can be a challenging issue, especially when a valuable family business is involved. A family law attorney might work with a business owner to help negotiate a fair settlement.