Georgia residents are likely aware that almost half of all marriages end in divorce these days. What they may not realize is that in some cases, the dissolution of a marriage can have consequences for a business. This is particularly true for small, family-owned businesses.
The division of assets can affect businesses
When people get divorced, one thing that happens is that their assets and liabilities are divided. For high net worth individuals, this can have serious consequences for their careers. For example, some executives receive part of their compensation in stock. They may lose half of their stock to an ex-spouse, effectively making them unwilling partners.
There are a few different ways to handle this. One is to offer to buy an ex-spouse out. Another may be for a spouse to sell off their stock and remove themselves from the situation. Issues like these are much easier to manage when a divorce is amicable.
In family-owned companies, married couples may work closely together every day. A divorce can affect the whole vibe of a workplace. Other workers may feel uncomfortable if the divorcing couple is strained. It can sometimes be hard for the separated couple to maintain professionalism without giving into emotions. Again, one partner buying out the other is a common solution to this problem.
It’s always prudent to think about separating personal and business assets before marriage, long before divorce is even on the horizon. An experienced lawyer may be able to provide solid advice about business formation. An LLC structure might provide some protection for company assets. Another option may be to form a trust that owns the company rather than an individual. It all depends on the state laws and specific circumstances.
