If you have found real estate to be a lucrative business, protecting your portfolio from your upcoming divorce is crucial. Your spouse may share some ownership of your real estate properties. A divorce settlement could cause you to sell off your properties and leave your operation in poor shape.
Preserving a business from division in divorce is not always easy. However, The Motley Fool explains some ways you can give yourself the best chance of coming out of your divorce with your real estate investments in good shape.
Check your pre-marital documents
You may have taken actions to protect your business from divorce before you got married. You may have designated your business as separate property in a prenuptial agreement. You might have also set up a business entity separate from your personal finances, such as an LLC. Presuming you have not commingled your personal money with your business assets, a court would not count your business as marital property.
Do not make rash decisions
Learning that your spouse wants a divorce could provoke you to make decisions that could harm your business. Before your spouse files for divorce, you may quickly sell off your real estate assets or transfer them to different owners in the hopes of getting them back post-divorce. However, a divorce judge may look at these actions as efforts to prevent your spouse from getting a fair share and order the sales or transfers cancelled.
Buy out your spouse
It is possible your spouse does not want to have any further involvement with your business and would be happy with a buyout. After having a professional estimate the value of your real estate portfolio, you could offer your spouse an amount for his or her share of your business. In doing so, make sure you have a written agreement in place so that everyone knows their rights and obligations.