When entrepreneurs kick off their businesses, they think about overhead, product fit and a hundred other things that they believe will help it succeed. But one thing they don’t think about is their marriage and what would happen to their precious business if they (or one of their shareholders or investors) got divorced.
“This is a topic that comes up for almost half of our small-business owners,” says Charley Moore, 47, founder and CEO of San Francisco-based Rocket Lawyer, an online legal consulting business. “If I were to tell a person that you're going to enter into a deal and about half the time you'll lose your assets, they would definitely want to put that deal in writing. But they don't. That's marriage in America.”
Crain’s Chicago Business came up with a few ways to protect yourself in case of divorce emergency. First, they strongly recommend a prenuptial agreement. Without prenuptial agreements, shareholder agreements or buy-sell agreements—contracts describing how co-owners in a business would buy or sell their interests—there can be a long legal battle over the value of the assets. In some cases, that fight can last two or more years. It can also sink a business.
Next, they recommend having a strong team behind you to see you through the bad times and make sure your head’s clear. Crain’s interviewed a few entrepreneurs, including health care consultant Rebecca Saltiel Busch, to talk about the subject, and she wholeheartedly agrees with this.
“I just brought people in who I trusted and invited them to supervise my decisions,” she told Crain’s. “I had way too much responsibility between my kids and the people working for me. When I started my business, I formed a team. When I got divorced, I also formulated a team.”
Family business and divorce: a six-step survival guide (Crain’s Chicago Business)