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Keeping your business out of your divorce

On Behalf of | Oct 2, 2023 | Divorce, Professional Practice & Business Ownership

If you get married in California and own a business, taking the steps needed to protect yourself if a high-asset divorce occurs is essential. While you expect the best from your marriage, statistics indicate that it’s prudent to have a plan in place just in case.

Pre- and post-nuptial agreements

One of the first steps you can take if you’re getting married is to draft a prenuptial agreement. In it, you can stipulate that you will retain your shares of your business if a divorce occurs. However, keep in mind that a prenuptial agreement must be fair, or a judge may rule it unenforceable, so you may have to be willing to make other concessions that would make up for the value of the business.

If you don’t have a prenup and own a business while married, you can draft a postnuptial agreement to establish your legal ownership of the business. This option focuses on your assets and income as a couple who have been married for a while, and you’ll have a better idea of what assets you may have to offer your spouse in place of the business.

Buy-sell agreements

Using a buy-sell agreement can also be beneficial as it can help establish the value of your business at any point in the future when a disability, death or a high-asset divorce occurs. Common valuation methodologies include fixed price, market approach, independent appraisal or formula.


Doing all you can to protect your business assets is critical when forming a business. Creating a trust can help if something goes awry.

Taking prudent steps to ensure that you keep your business after completing a high-asset divorce is possible if you approach it wisely. While you’ll likely do all you can to avoid an end to your marriage, it’s best to be prepared.