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Why you need a prenuptial agreement as a business owner

On Behalf of | Nov 30, 2021 | Divorce

Many Californians consider getting a prenup taboo because it presumes the marriage will fail, but in cases where one or both spouses are business owners, it’s simple practicality.

Divorce is a reality for nearly half of all marriages, and a prenuptial agreement allows couples to predetermine who is responsible for certain assets during the marriage and in the event of separation.

Protecting your interests

California law considers any asset or debt acquired during marriage community property, meaning the court will divide it equally upon divorce. If your split is amicable, then your spouse may agree to forfeit any claim to your business assets as part of your settlement agreement but if not, then the judge may award your ex a significant piece of your livelihood.

Shielding your business partners

Talking about a prenup to protect your business may not be romantic, but it’s also not just about you. If you have other business partners or employees, it’s important to think about how your marriage dissolution will negatively affect them should your spouse gain half the value of your company.

Safeguarding your spouse

Not all the stipulations of a prenup have to do with divorce preparations. If your business fails and you must file bankruptcy, an ironclad prenuptial agreement may prevent the courts from holding your spouse responsible for repaying your company’s debts.

Being practical, prepared and proactive can keep your entire life from falling apart when things get tough. Having an ironclad prenuptial agreement is essential to keeping your business and personal assets separate and safe.