Owning a business is a major achievement, but divorce can threaten everything you’ve built. Without the right precautions, Missouri’s equitable distribution laws may classify your business as marital property. Taking proactive steps now helps you maintain control and secure your financial future.
Keep business and personal finances separate
Mixing personal and business finances weakens your claim that the business is separate property. Maintain separate bank accounts, credit cards, and financial records. Paying yourself a reasonable salary instead of reinvesting all profits back into the business also shows a clear boundary between business and personal finances.
Use a prenuptial or postnuptial agreement
A prenuptial or postnuptial agreement outlines how the business will be handled in a divorce. These agreements specify whether the business remains separate property or define a fair division if needed. If you don’t have one, you can still create a postnuptial agreement while married.
Establish a buy-sell agreement
A buy-sell agreement sets rules for what happens if an owner divorces. This agreement, often created with business partners, includes provisions that prevent a spouse from gaining ownership or require a spouse to sell any interest back to the business.
Get a proper business valuation
If the business is part of marital assets, an accurate valuation ensures fairness and prevents inflated estimates that could result in losing more than necessary. Hiring a neutral financial expert provides an unbiased assessment.
Negotiate trade-offs in asset division
Rather than splitting business ownership, negotiate other assets to offset the business’s value. Offering real estate, retirement accounts, or investments helps maintain full control of the business. Structuring a buyout plan with scheduled payments also serves as an option.
Proactive planning and clear financial boundaries safeguard your business from the impact of divorce.