We Got This...

Protecting business interests with a prenuptial agreement

by | Aug 2, 2019 | Premarital Agreements

Prenuptial agreements have a better reputation today than they did a decade ago. It’s becoming increasingly common for couples planning to tie the knot in North Carolina to explore their options with a prenup. This document can spell out who owns what before the “I dos” are exchanged.

A prenup can be especially beneficial if one or both parties owns a business. One option is for a spouse-to-be/business owner to determine the company’s premarital value so that it won’t be subject to distribution should a marriage end. It’s also advisable that an owner decide what will happen with business appreciation or depreciation from the date of marriage. For example, the business owner may opt to share profits and losses with their new spouse.

With a non-titled spouse’s contributions, it can be helpful to establish clear expectations with a prenuptial agreement. Additionally, a prenup can stipulate what a new spouse’s compensation will be if they’ll be working in the business. The value of indirect spousal contributions to the business’ growth can be addressed as well. Also, a prenup can cover whether or not business capital needed for the company would come out of marital property. The business may then become marital property if joint funds are used. If the business will be marital property, a prenup can specify what percent a spouse would be entitled to receive.

A family law attorney can prepare a prenup that makes provisions for how existing and future business assets would be split should a marriage end. Having these details worked out ahead of time could make a divorce less contentious when it comes time to determine who will get what. Updates can be made as well if circumstances with assets change significantly over time.