You've invested everything in your business—literally everything—and you want to make sure that your hard work pays off well into the future. How can you prevent losing everything in your personal life? A prenuptial agreement (prenup) with a divorce lawyer can help ensure that your hard work won't be squandered if you end up separating from your spouse or partner in the future. Why should you engage a divorce lawyer to draft a prenuptial agreement as a business owner?
1. Protect Assets You Acquired Before Marriage
In some jurisdictions, you can't consider assets acquired before marriage or cohabitation when dividing property after divorce. However, these facts must be properly established. You must consult with an experienced divorce lawyer who can advise you on how best to safeguard the business assets you've acquired before marriage.
2. Clarify What Happens to Gifts or Inheritance
When it comes to gifts and inheritance, prenuptial agreements specify how such assets will be treated in case of divorce. For example, some spouses may agree that business inheritances are not considered joint property, so if one spouse retains ownership of them, they won't be required to divide them with their ex-spouse if they separate.
3. Document Your Business Worth Before Marriage
In order to protect your assets, It is wise to determine what percentage of your business your soon-to-be spouse should be entitled to if you two were ever going through a divorce. But you need to show your business' worth at that date. A divorce lawyer can help document everything properly for future reference if you ever need it.
4. Clarify Responsibilities on Business Liabilities
When you enter into business with another person, especially your spouse, it's important to ensure that your shared assets aren't vulnerable during and after a divorce. For example, what happens to loan repayments where your spouse is a co-signer? A prenuptial agreement defines how each party should share responsibilities for liabilities incurred during the marriage.
5. Better Protection for Your Personal Brand
Many businesses, especially small ones, depend on personal branding, and a messy divorce can give the wrong image. A prenup gives a higher guarantee of a quick, trouble-free divorce. It helps keep out negative headlines and protects your personal brand.
A divorce is not something to look forward to, but it could happen. As a business owner, a prenup is a vital protection.
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6 June 2022
When I started my first small business, I had no idea how much I really didn’t know. I was fully prepared to deal with customers, sell product and even handle complaints and returns. What I wasn’t aware of was that there is so much more to it. I was lacking the legal expertise to protect the company and myself. I wanted others to benefit from my experience, mistakes and lessons learned, so I started this blog. From employment law to the legal business contracts you’ll have to sign when you form partnerships, business law is complex. I hope that the information here will help you to be better prepared when you start your business so that you’ll know when you need to call an attorney and when you can handle things yourself.