Lessons from a Skinny Girl mogul: minimize the disruption to your business during divorce.

• Author: Hunt, Cathy C.
• Position: 2015 Law Journal

When it was announced that Skinny Girl Cocktail mogul Bethenny Frankel filed for divorce from her husband of three years, many wondered how much of her fortune would go to her husband and what effect it would have on her Skinny Girl empire.

During her short marriage, Frankel sold her low-calorie cocktail concept to Jim Beam for a reported $60 million. Following the sale, Frankel amassed a fortune in endorsement deals landing her on the cover of Forbes as one of its highest earning women. It is reported

that Frankel and her husband had a premarital agreement that was modified after the marriage. Whether her entire fortune was protected remains to be seen, but having a premarital agreement was probably one of the best business decision Frankel ever made, and it should serve as a lesson for all business owners. It is important to understand how a divorce will affect your business assets and what steps can be taken to minimize the cost and disruption to your business.

In North Carolina, when spouses divorce it is presumed that the marital assets will be equally divided. If one or both of the parties own a business, that property must also be valued and distributed along with other marital assets.

Many business owners ask "Can I be forced to run my business with my spouse? My spouse has never worked in the business and my business partners will never agree."

It is not common, but it can happen. Carl, a client with an Italian restaurant filed for divorce, and during the process a court ordered that his wife could come in and operate the business three days per week. His wife had never worked in the business, and the disruption eventually led to its closing. More often, the business will be awarded to the spouse best able to run the business, and the owner spouse will pay the other spouse for their interest in the value of the business.

Why would I have to pay my spouse for a company that I built? My spouse contributed nothing to the success of my business.

Frankel probably asked this question many times over. Frankel single-handedly built the Skinny Girl Cocktail business from an idea to a multi-million dollar company. Her spouse, on the other hand, contributed nothing to the value of the company other than to assist Frankel in their daily marital activities. There is no "my" when it comes to assets acquired during a marriage. In North Carolina, if an asset is acquired during the marriage, it is a marital asset, and title to an asset does not...