Owning a business can be both lucrative and deeply rewarding. However, as any business owner can tell you, it is not easy. Whether you are an entrepreneur running a startup or a business owner with decades of experience, getting married can change things. Anyone who plans to wed should understand how marriage and divorce can impact their business. One way to protect your business is through a prenuptial agreement.
A Prenup Can Protect the Business in the Event of Death or Divorce
No one gets married thinking that the marriage will end in divorce. The idea is unromantic at best and offensive at worst. However, statistics show that 40-50 percent of marriages do ultimately end up in divorce. Planning for this possibility is reasonable even if your relationship is thriving. Furthermore, prenuptial agreements can be beneficial even if a couple stays together until one of the spouses passes away.
You can use a prenuptial agreement or premarital agreement to classify certain property as marital property belonging to both spouses and certain property as non-marital property belonging to only one spouse. Without a prenup, business assets and income can become entangled with personal assets and income. This can make dividing assets during divorce much more complicated and contentious than it would otherwise be.