Prenuptial Agreements 2: Divorce-Proofing Your Business

A Columbus divorce attorney can guide you through the tricky prenup process

Prenuptial agreements are like insurance for your marriage. You hope you never need it, but when you do, you’ll be glad you have it. When you’re bringing your livelihood into a marriage, having that safety net is even more important. Meeting with a Columbus high asset divorce attorney to put together your prenuptial agreement doesn’t just protect your small business. Making tough decisions early on can protect your betrothed from incurring your debt, prevent your family business from being torn apart and take a weight off of any business partners.

The basics: What is a prenuptial agreement?

A prenuptial agreement is a written contract intended to modify certain statutory marital rights between parties who are considering marriage. A good prenuptial agreement discloses the value of all of the parties’ property as well as debts and income of both partners, and defines what the individuals’ rights will be should the marriage end, whether in the event of a divorce or the death of either party.

Although prenuptial agreements (also called “antenuptial agreements,” or simply prenups) are often used to protect the assets and income of a wealthy partner, the number of couples turning to prenuptial agreements before they are married has seen a significant uptick. Such agreements can not only prevent potential arguments in the event of a divorce, but also pass separate property to children from a previous marriage, clarify financial rights and protect spouses from the others’ obligations.

By employing a prenuptial agreement, you and your spouse can decide beforehand what property will be considered separate property and what property will be considered marital property and how that marital property should be divided.

Why does your business need a prenuptial agreement?

A prenuptial agreement can save you a lot of headache where a small business is involved by predetermining the distribution of assets in a divorce. If you have actively worked in and developed your premarital small business during the marriage, the court could still determine that its value is partly or entirely marital property and award your spouse a share of the same. A prenuptial agreement that makes it clear such increase would remain separate property could help to keep the business and its assets intact.

If there are multiple business owners, the business partnership agreement or shareholder agreement can designate the process of a buyout or valuation of interest if one of the business owners suffers a divorce. Although this agreement may not be binding in family court, the court would likely respect the effort to minimize disruption to the business and existing partners.

Although it may be hard to completely shield a business from the impact of a divorce, taking the appropriate steps can limit the efforts of a non-titled spouse’s claim for a slice of the pie.

In addition, a prenuptial agreement not only protects the business’ assets, but also protects the non-owner spouse from potential business liabilities.

How can a prenuptial agreement protect the ones you love?

Prenuptial agreements are not all about “mine” versus “yours,” especially where business partners and family businesses are concerned. Knowing how assets will be divided in the event of divorce can protect your extended family, and even your children.

Candidness about how assets will be divided is even more important when one or both partners are also small business owners. For example, if you have stake in a family business, other family members might not want to risk losing assets to someone outside of the family. In that case, there can be a number of different people to consider, each with individual needs and input to consider.

A Columbus high asset divorce attorney can help protect your business.

The only way to ensure your prenuptial agreement is not just valid, but ultimately protects your future, is to bring it to a Columbus high asset divorce attorney. The lawyers at Babbitt & Dahlberg share more than 60 years of experience, and will handle your prenuptial agreement with the respect it deserves. Give us a call at 614-228-4200 or fill out our quick online form to schedule a consultation today.

FINAL_JayLearn more about Jay’s experience and how he can help you navigate your high asset divorce.

 

 

 

 

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