- posted: Oct. 20, 2022
With the average age of Americans getting married approaching 30, more and more newlyweds are entering into marriage with significant assets of their own, including an ownership stake in a business. It is very important to business owners that they keep all rights and powers regarding their business no matter what happens in the marriage. There are legal ways to ensure that the spouse who owns the business retains control of the business after divorce. One of the most powerful tools is a premarital agreement, which can provide that either spouse’s interest in a business will remain their separate property.
If a couple becomes concerned with this issue after the wedding, they should talk to an experienced California family law attorney about entering a postnuptial agreement with the same terms.
There are numerous ways in which a prenup or postnup agreement can protect your business, including:
- Designating the business as separate property —If one spouse enters the marriage with a business of their own, the agreement can specify that the business will be treated as separate property, and not community property, during any divorce.
- Stating an agreed-upon business value — The agreement can stipulate that both spouses will share in the appreciation of the business that occurs while they are married. The agreement can also contain an agreed-upon value of the business at the time of marriage, which can avoid disputes about the appreciated value when and if the couple divorces.
- A procedure for evaluating each spouse’s ownership stake — When the family company is run jointly by a husband and wife, it is in both their interests to agree on how best to handle the separation of one spouse from the business in the event of divorce. One way to do this is to have the prenup or postnup agreement include a procedure for evaluating each spouse’s ownership stake in the business and for allowing one spouse to buy the other out, either in a lump sum or in installment payments over time.
If you are a California business owner concerned about how divorce could affect your company, the family law attorneys at Strategic Law Command in Roseville will advise you regarding how a prenuptial or postnuptial agreement can protect your interests. For a consultation, call 916-787-1234 or contact us online.