Couples about to marry in Pennsylvania seldom want to consider the possibility that their marriage will not last. However, the fact is that some marriages end in divorce. In those circumstances, couples must confront the frustrating and often contentious process of property division. If a family business is involved, a divorce could be devastating to the company unless provisions have been made early on.
For those concerned with the welfare of a family business, a prenuptial agreement may be beneficial. If a business owner's adult children do not marry until their late 20s -- as seems to be the trend these days -- those children may already own shares in the business. When they marry, the children risk losing those shares if the marriage should come to a bad end. A prenuptial agreement is one way to protect the business from being awarded to a child's ex-spouse in a divorce settlement.
The suggestion of a prenuptial agreement may raise the hackles of some. However, some statistics show that 40 percent of all first marriages in Pennsylvania and across the country do not last. The chances of divorce increase with each subsequent marriage. Business owners entering a second or third marriage could face the possibility that their company will end up belonging to a new spouse's children instead of his or her own children. A prenuptial agreement can prevent that from occurring.
As difficult as it may seem to broach the subject of a prenuptial agreement, doing so may save needless anxiety and frustration if a subsequent divorce spawns property division issues. An attorney can make sure that protecting one partner's business does not compromise the financial security of the other. Each party receiving counsel from an independent attorney will ensure the protection of important property rights.
Source: macon.com, "Prenuptial agreement can help protect shares in a family business", Jan Flynn, Aug. 30, 2016