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Family law and business growth during a marriage

When a person owns a business in which a spouse is not actively involved, the owner may wrongly assume that the business is not shared property. In fact, under British Columbia family law, some business owners can find that their hard-built businesses are considered community property. It is a good idea to consider these legalities and to protect a business from such consequences in advance.

Those who start businesses prior to their marriage should consider including this asset as part of a prenuptial agreement. It is important to remember that even if a business begins prior to marriage, any growth in that enterprise after a couple ties the knot can be considered marital property. A prenuptial agreement can protect this growth by designating that assets tied up in the business should belong solely to one party in the case of a divorce.

Another option is to transfer ownership of a business into a trust. This can be a more complicated option, however, so it is important to involve a lawyer in this process to clarify the extent to which the business is "divorce-proof." While no one expects to divorce when they tie the knot, the earlier these precautions are taken the better from a legal perspective.

A business caught up in a divorce can suffer in many ways. For example, splitting a business between feuding spouses can cause operational turmoil and get in the way of profitability, so steps to keep these things separate are often the best way to go. Those with questions about how their business will be treated in a divorce or how to protect a business under family law should speak with a British Columbia lawyer. 

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