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By Karen E. Klein Q: I plan to start a business and am recently divorced. What is the best way for me, or any other divorced person, to take ownership of a business and still protect his or her interests if the ex-spouse gets greedy? I'd hate to put my hard work and sweat into building a good business just to have my ex-wife drag me into court in a few years wanting a piece of my new success. -- K.C., Burbank
A: If your divorce is final, any new venture you embark upon, or property you acquire, should be safe from the claims of a former spouse, says Edward L. Winer, a family-law specialist with Moss & Barnett in Minneapolis. Your legal exposure is subject to the laws of the state where your divorce was granted, however, so you should consult with your attorney personally before you go forward.
As a general rule, however, anyone who has been through a divorce should make a point of screening any new financial ventures with legal counsel, Winer says. "A person paying alimony, or still subject to the risk of paying alimony, may face postdivorce legal action to increase the amount of alimony if the new venture is successful," he says. So, just to be safe, talk to your lawyer before launching your new business.
If you're still in the midst of a divorce, you would definitely want to get legal advice on whether it's advisable to expand an existing business or start a new one. It may be better to wait until the marital split has been finalize rather than run the risk of having to share new assets with a soon-to-be ex.
Have a question about your business? Ask our small-business experts. Send us an e-mail at firstname.lastname@example.org, or write to Smart Answers, BW Online, 45th Floor, 1221 Avenue of the Americas, New York, NY 10020. Please include your real name and phone number in case we need more information; only your initials and city will be printed. Because of the volume of mail, we won't be able to respond to all questions personally. Karen E. Klein is a Los Angeles-based writer who specializes in covering covered entrepreneurship and small-business issues.