How to Divorce-Proof Your Business with a Buy-Sell Agreement

There are a number of things you can do at the “entity” level of your business that could prevent your husband from keeping an ownership interest in your business. [in the event of a divorce]

So begins Jeffrey Landers of Bedrock Divorce Advisors, LLC as he writes about using buy-sell agreements to “divorce-proof” your business.

Unfortunately, divorce is quite common today.

  • When any group of investors comes together, one of the most likely things that will happen in their collective futures is that one or more of them will be divorced.
  • Because of this, most buy-sell agreements have provisions enabling the corporation (or the other shareholders) to purchase shares that otherwise might be granted to the non-owner spouse in a property settlement decree in a divorce.
  • The purpose of divorce provisions in buy-sell agreements is, of course, to prevent shares from falling into the hands of potentially unfriendly ex-spouses.

Jeffrey provides a nice and brief overview of the purposes of buy-sell agreements in his recent article for the Huffington Post.  Check it out.  The article is the third in a five part series on how to divorce-proof your business.  The first article addresses the Basics.  The second article addresses Prenup Agreements.

Find out more about buy-sell agreements, see my new book, Buy-Sell Agreements for Closely Held and Family Business Owners.