Business Owners and Prenuptial Agreements

 Posted on November 28, 2018 in Prenuptial Agreements

Although prenuptial agreements are not something that business owners typically think about when they become romantically involved with another person, the reality is that making these types of considerations is extremely important for those who are considering marriage. Entering into this type of contract before a marriage takes place can give both parties peace of mind, while also ensuring that a company’s assets are protected in the event of divorce. For help drafting or enforcing your own prenuptial agreement, please contact an experienced high asset divorce attorney who can assist you.

Owning a Business Prior to Marriage

If a person owns a business going into a marriage, then those assets will most likely fall under the category of separate property in the event of divorce. However, any growth in value and earnings stemming from the business can and probably will be considered community property, which means that if a couple decides to divorce, the original business owner would need to split those earnings down the middle. Furthermore, if the spouse who didn’t originally own the business ended up substantially contributing to it during the marriage, then that business interest could be considered commingled with the couple’s community property and so converted into marital property for the purpose of division upon divorce.

A couple can forestall all of these complications by entering into a prenuptial agreement before getting married. For instance, the agreement could include provisions explaining that any increase in value or earnings from the business during the course of the marriage will still remain the original owner’s separate property in the event of divorce.

Drafting a Prenuptial Agreement

When creating a prenuptial agreement, both parties are required to disclose all of their assets and liabilities, obtain separate legal representation, and sign the agreement voluntarily. Violating any one of these rules could result in a portion of a prenuptial agreement, or the entire agreement itself, being thrown out by the court.

Ensuring that these procedural rules are strictly followed is important, as drafting a prenuptial agreement is one of the best ways to make sure that one spouse’s business isn’t sold to pay for the divorce settlement, or that the business isn’t pursued by creditors who are attempting to collect on the other spouse’s debts once the divorce is finalized.

Find an Experienced High Asset Divorce Attorney

If you are contemplating marriage and have questions about whether a prenuptial agreement is right for you, your business, and your family, it is critical to speak with an experienced Leander high asset divorce lawyer. To ensure that you understand your options and that any prenuptial agreements you enter into are drafted correctly, please call 512-610-6199 to speak with one of the dedicated high asset divorce lawyers at Powers and Kerr, PLLC today.

Source:

https://www.dallasnews.com/business/personal-finance/2018/02/14/even-happy-marriage-can-use-agood-prenup