VICKIE LYNN COCHRAN attorney at law
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Shielding an Arkansas private business from divorce

A family business can lay a secure foundation for generations, or it can cause disagreements and divides among relatives that destabilize the future. A big concern for Little Rock spouses is the effect of a divorce on private businesses. Fortunately, there are several ways to protect a business in case a marriage ends.

Financial and legal experts suggest developing an early business security strategy. You don't have to wait until a spouse files a petition for divorce to diffuse property division issues. Some business owners make plans even before they marry.

Arkansas prenuptial agreements are contracts between future husbands and wives that spell out asset and liability ownership. The agreement is signed before marriage, kicks in the day of marriage and is enforced during divorce. A business can be isolated from marital property in a pre-marital contract or a post-nuptial agreement, as long as a fiancee or spouse agrees to the terms.

The value of assets, including private businesses, is required for a fair divorce settlement. Many business owners have an idea about the worth of their companies, but a best guess won't satisfy a judge. Asset evaluation professionals provide accurate results that are acknowledged not only by courts judges but lenders and shareholders, too.

Keep personal and business finances separate. Many private company owners make the mistake of mingling the two, only to learn during divorce that the once-separate business has morphed into marital property. Resist the urge to draw any business funds into a marriage other than a pre-set salary.

Business partners can be adversely affected by one owner's divorce settlement. Legal agreements between partners can address the "what if" questions of an owner's divorce, death, incapacity or retirement. The legal comfort of business agreements also protects you in case another shareholder divorces or dies.

Divorce can blindside business owners. Attorneys offer asset guidance before, during and at the end of a marriage.

Source: PropertyCasualty360.com, "How to Keep Divorce from Destroying Your Agency" Laura Mazzuca Toops, Mar. 11, 2014

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