The hallmark of getting a start-up business off the ground is the single-mindedness required: Long hours, few days off, blood, sweat and tears poured into your business. When every drop of your energy is focused on one thing, relationships can take a distant second place. Should you be surprised when your spouse asks for a divorce? Could you have done something to protect your business?
Many could say the more important question is how do you save your marriage from your business? There are things you can do that will protect your relationships — and ultimately help protect your business — from divorce.
Here are a few:
- Be here now: Many entrepreneurs find a very real inability to leave work at work. They are constantly on their smartphone or mentally running through work issues rather than being in the present around family. Finding time to unplug and recharge can only help give you more quality time with loved ones.
- Share the struggle: Rather than keeping the challenges to yourself, sharing them with your spouse will give you a common goal. A word of caution: don’t over-share. Like the rest of life, make sure there is balance in your conversations. In other words, don’t discuss work all the time.
- Schedule time: Setting aside time for each other, as well as setting expectations (such as no phones) during that time will help keep your relationship alive.
Prevention is better than the cure
From a business perspective, time spent early with an experienced attorney can save time, money and heartache later. Three preventative steps you should consider taking that can divorce-proof your start-up:
- Sign a prenup: If your business exists before marriage, designate it as separate property owned by only you in a prenuptial agreement. It may be an awkward conversation, but explain to your future spouse that it’s not a lack of trust, but a responsibility to protect the others involved: Employees, suppliers, investors and customers.
- Set up the company properly: Using a Domestic or Foreign Asset Protection Trust transfers ownership of the company into a trust, thereby making the issue of separate versus marital property irrelevant. This move also protects the value of the business’ growth. Your attorney can advise you on the best business formation for your start-up regarding both business protection and tax law.
- Create a buy-sell agreement: Without a buy-sell agreement in place, a closely held or family business faces a world of financial and tax problems with an owner’s divorce, as well as other circumstances such as sale, incapacitation, bankruptcy or retirement.
With the divorce rate at 40 percent for first marriages and nearly 60 percent for second marriages, taking steps to protect your company is simply good business. In the event of divorce, consider retaining an attorney experienced in handling complicated, high-asset divorce cases and related business issues.