In the event of a divorce, protecting assets may be one of your top goals. This may be particularly true if you own a business, which could be considered marital property. Fortunately, there are agreements that you and your spouse can put into place before you’re married, or even after you’re married, that can help you protect your assets as well as your business.
The very first step you take – if you are not yet married – should be setting up a prenuptial agreement in advance of your wedding.
How can a prenup help?
A prenuptial agreement can help because it will allow you and your spouse to divide assets in certain ways in advance. For instance, you may specify that any business assets should remain in your name alone. You may also want to indicate how much money or other assets you’re bringing to the marriage, making it easier to retain them.
The hope is that, since you and your spouse are on good terms, you can come up with a fair prenuptial agreement. If you get divorced, you may be on less than amicable terms, but a lot of these difficult financial decisions will have already been made. You’ll get the peace of mind of knowing that your business and your assets are safe no matter how your relationship evolves.
What if you’re already married?
Of course, if you’re already married, then you can’t use a prenuptial agreement. But the good news is that you can usually set up a post-nuptial agreement instead. It offers many of the same opportunities, but you and your spouse can both sign it and agree to the terms, even if you’re already married.
A post-nuptial agreement, like a prenup, can’t be designed to influence you to get divorced and it can’t include anything about child custody rights, but it certainly can help you protect your assets. People sometimes use these agreements if they become business owners after they have married, for example, or if a small business grows dramatically in value and they don’t want to risk losing their interest and investment in it.
All that being said, a divorce with these types of assets on the line can certainly be complicated. It’s very important to understand exactly what legal steps to take and all of the options at your disposal. Seeking legal guidance is a good place to start.