Business owners who invest time and resources in their enterprise, and who are planning a marriage (or remarriage) should look at getting a thorough, well drafted, negotiated prenuptial agreement (or, “prenup”).
Although it’s not the most romantic topic to speak to your fiancé about in the months leading up to the big event, prenups can save future headaches and perhaps more critically – dollars, should the marriage end in divorce. Like a good estate plan (which should go hand in hand), a prenup is insurance for the parties to know the marital estate will not be needlessly robbed of assets by extensive litigation, should the relationship dissolve.
Why? Because even if a business that started before marriage is allocated to one spouse, any increase in value during the marriage, particularly businesses heavily dependent on the spouse’s personal efforts, may be subject to division as marital property. It can be costly to hire forensic experts to divide business interests down the line.
A prenup serves as a valuable tool to ensure that both parties have certain expectations upon the unhappy end to matrimony. Three basic tips to consider:
1. Don’t do it yourself. Hire competent, experienced attorneys on both sides of the agreement
2. Don’t wait until the last minute. Agreements prepared in a short amount of time are rushed, sloppy, stressful and subject to more challenges. Allow at least three months from start to finish; longer in matters where one or both parties have many assets.
3. Don’t try to jam a one-sided agreement down your fiancé’s throat. It is critical be somewhat generous in allocating interests, if only to help minimize the possibility the agreement will not be enforced.
For more information about prenups or if you have specific questions, please contact Tredway Lumsdaine & Doyle’s managing partner Daniel R. Gold at email@example.com or (949)756-0684.