Consider a prenuptial agreement when owning a business

| May 28, 2020 | Divorce |

The use of prenuptial agreements is on the rise nationwide and in Virginia. One class of people who can benefit the most from this agreement are those who have owned their own business prior to the marriage. The prenuptial agreement can help protect the business and their assets in the event that the marriage ends in divorce.

Absent an agreement, a business started before the marriage may become marital property in whole or in part. The prenuptial agreement can not only place a valuation on the business before the marriage, but it can also ensure that all or part of the business remains with the owner if the marriage ends. The spouses may want the non-titled spouse to play a role in the business during the marriage. This can be spelled out in the prenuptial agreement along with giving them a certain percentage of the business in the divorce.

There may also be issues in a divorce if one spouse was not taking an income and was instead leaving money in the business. Ordinarily, this would mean that they are not earning marital assets. The prenuptial agreement can address how this would be treated in the event of a divorce. Many couples do not want to think about a divorce before they even get married, but this agreement is critical for self-protection.

In order to draft and negotiate a prenuptial agreement, future spouses may consult with a family law attorney. Each spouse would need their own attorney to represent themselves during this process. The attorney may help make a potentially difficult situation easier by helping their client with provisions of the agreement and handling it in a professional manner. These negotiations can be fraught with minefields and difficulties, but a divorce attorney may be able to anticipate problems and propose solutions.