Parties to a Divorce Business Owners and Partners
A trip down the aisle rarely includes plans
to uncouple. But should it happen, don’t
be surprised if the judge or mediator
suggests both spouses purchase life
insurance on themselves for the benefit
of the other spouse if minor children
or financial responsibilities exist post-
divorce. A new business comes with inventory,
investment and, many times, debt. In order
to provide solvency, business owners
must protect their personal and business
interests with life insurance in the case of a
premature passing of an owner. Insurance
on the owner could help the surviving
spouse weather the transition until the
business can be continued or sold.
The policy coverage might extend for a
certain period, making term insurance an
appropriate fit for the situation.
If you have a business partner, that person
is the equivalent of your professional
spouse. Just like your domestic partner,
business partners need to be protected
with life insurance in the event of the
other’s demise. Insurance should cover
each partner and establish how a transition
will occur if one of them dies.
When a business partner passes away,
money helps purchase the remaining
stock, or business interest from the
deceased’s estate or family. This assures
business continuity for business customers,
and creates an estate that immediate
establishes value on the asset for the
decedent’s estate.