Divorce can put business ownership at serious risk. To protect their interests, business owners need to take specific legal steps before and during marriage. These steps can make the difference between losing control of a business and ensuring its future.
Pre-marital agreements
A prenuptial agreement offers one of the most effective ways to safeguard business assets. By clearly defining business ownership before marriage, a business owner can ensure the company remains separate property.
Under Ohio law, this agreement can prevent a spouse from claiming any interest in the business during a divorce. However, both parties must enter it voluntarily and with full disclosure of all assets for the court to enforce it. This legal protection helps business owners maintain control over their companies.
Post-marital agreements
If the parties didn’t create a prenuptial agreement, a postnuptial agreement can offer similar protection. Under Ohio Revised Code Section 3103.06, the court can enforce postnuptial agreements, provided both parties voluntarily enter into them with full asset disclosure.
These agreements should clearly outline how the parties will divide business interests and other assets in the event of a divorce. By designating the business as separate property, a postnuptial agreement helps safeguard business assets. This protection remains in place even if one or both parties never signed a prenuptial agreement.
Separate business assets
Keeping personal and business finances separate is important to avoid the business being considered marital property. Ohio Revised Code Section 3105.171 classifies commingled assets as marital property, meaning the court could divide them during the divorce. Using separate bank accounts and maintaining clear financial records can prevent this from happening.
Protecting business ownership
Business owners can secure their company by using legal protections tailored to Ohio law. By being proactive and understanding the legal options available, owners can protect their business from unnecessary risk during a divorce.