Divorce is different for everybody, and the best divorce attorneys understand that there is no “one size fits all” approach. Those men and women running a business have unique challenges when it comes to dissolving a marriage.
At Lawrence Law Office, we take pride in providing the best representation possible to our high net worth clients, including chief executive officers and others who work in a corporate suite. Below, we offer our best tips for protecting yourself and your finances in a divorce.
Get A Prenuptial Agreement
We realize many people reading this are already married. But in the off chance you are not, the single best thing you can do to protect your business and your other assets is to have a prenuptial agreement. Ohio, unlike other states, prohibits postnuptial agreements in most situations, so you can’t fall back and use that option once you are married.
Meet with an Ohio family law attorney to draft an air-tight prenuptial agreement. If your spouse signed it voluntarily, then judges will uphold them in most circumstances, at least when it comes to the division of marital property and spousal support.
Identify Your Interest In Your Company
It makes a big difference whether you are the owner and CEO of the company or if you only work in a management role but have little or no ownership. If you have a sole proprietorship, then you own the whole company. By contrast, you might have been hired by the Board of Directors to run a company in which you have little or no stock ownership.
When couples divorce in Ohio, assets acquired during a marriage are typically considered marital property, which must be divided equitably. If you are simply a salaried CEO, then there won’t be much to divide—your spouse can’t take half of your job. However, if you own large amounts of stock, then that could be marital, depending on when you acquired it.
Dividing stock is difficult because your spouse can now get a legal ownership interest in your company. Some companies have buy-sell agreements that will force you to sell back to the company a partnership interest or other interest in the event of divorce. You should review all employment contracts and other documents with an attorney to nail down your ownership interest in the company.
Protect Your Privacy
CEOs of large companies are public figures, at least locally. Divorce is, unfortunately, a very public process, though there are steps you can take to protect your privacy:
- Consider mediation or arbitration to resolve any disputes. These are private alternatives to going to court, and you might be able to reach an agreement with your spouse on issues like spousal support, child support, division of marital property, and child custody.
- Get a nondisclosure agreement to be signed by all attorneys and other interested parties who handle sensitive business records. You don’t want to compromise your business in the process of getting divorced.
- Avoid divorcing through the media. Little is gained by disclosing embarrassing information about your spouse.
We understand how important our clients’ reputations are to them, so we make privacy a high priority in any CEO divorce.
Give Up Non-Business Assets First
When it comes to dividing marital property, all marital assets are put into a pot and assigned a value. Then the pot is divided. You and your spouse can reach an agreement on how to divide it, or the judge will order a division. Often, the division is 50/50, though it could be different.
The key is to protect the business you own, which means you might give up different assets. If your business is worth $1 million and your spouse is getting 50% of all assets, you should try to give him or her $500,000 in other assets. For example, your spouse might get a family home instead. By keeping 100% of your business, you won’t be forced to sell it or to include your ex in how the business is run.
Hire A Lawyer Who Understands High Net Worth Divorces
The more assets a couple has, the more complicated their divorce. Had you divorced at 20 before you began your career, the divorce would be much simpler.
At Lawrence Law Office, our team has represented many business owners and other executives in their divorces. We understand the key issues well and can help you come out of the divorce as unscathed as possible. For more information, please contact us today to set up an initial consultation.