Financial independence and charting your own course are things a lot of women don’t take for granted. A business you established and made successful and resilient can seem like a lot to lose in a breakup.
But it is possible to lose an entire business, or see it divided or dissolved, in a divorce. An experienced business and divorce attorney can help you think through prenuptial and postnuptial agreements to protect yourself. Missouri businesswomen also have a curious additional option you may want to discuss, called the Domestic Asset Protection Trust.
Marital property in Missouri
Missouri is a “dual property” divorce state, so any growth, profits or appreciation your business achieved during the marriage is marital property and can be divided during divorce proceedings. If the business was founded during the marriage, the whole outfit is fair game. There are some exceptions and caveats, but if it’s your business, exceptions and caveats may not sound comforting.
Divorce-proofing your business
Taking action as early as possible in a divorce is likely to maximize your chances of the outcome you want. Taking actions as early in a marriage or even in your single years is still better.
It may seem selfish or distrustful to divorce-proof your business against your spouse or even against some future spouse you haven’t even met, but you might think of it as an insurance policy. Having car insurance is not an aggressive move against your fellow drivers.
Establishing a Domestic Asset Protection Trust
It some ways you have a rare opportunity, as Missouri is one of the relatively few states that recognizes Domestic Asset Protection Trusts (DAPT). If you’re single and a business owner, such a trust might help shield you from a variety of challenges, especially lawsuits.
The fundamental idea of a DAPT is that you establish the trust to be the owner of your business’s assets, and you can designate yourself as the trust’s sole beneficiary. Under a DAPT, its assets are beyond the reach of most creditors, although as the trust’s manager and beneficiary, the assets are within your own reach.
As a Missouri businessperson, you should know about DAPTs, especially if you’re thinking about getting married, you’re engaged, or happily married, or considering a divorce. But remember, you can’t move your assets into a DAPT to shield them from property division once a divorce has actually been filed. Thinking ahead is required.