Building a business from the ground up is an incredible accomplishment, and is often the culmination of years of planning and hard work. Once a Pennsylvania business owner has achieved success, he or she may want to protect the business. This is especially true as an individual prepares to marry. Drafting a solid prenuptial agreement is the best way to clarify how business interests would be treated in the event of a high asset divorce.
There are a number of ways to approach this issue. If there are no plans for the new spouse to play an active role in the business, then things are relatively simple. The contract can be written to state that all business assets brought into the marriage or obtained after the marriage will remain the personal property of the business owner, and not be subject to division in a divorce.
If there are plans for the spouse to take part in the business, things become far more complicated. Couples can negotiate what they believe would be a fair division of business wealth, according to the degree of input that the new party is expected to have. In fact, the couple can augment that agreement down the road if things change.
Prenuptial agreements are often viewed as a means of a more moneyed spouse taking advantage of his or her partner. In reality, many Pennsylvania residents use prenups to ensure that a fair division of wealth takes place in the event of a high asset divorce. No business owner should be faced with losing half of the value of a business he or she built from the ground up. On the other hand, a spouse who works for years contributing to the success of the family business deserves to share in the resulting wealth. A properly written prenup allows couples to achieve a fair outcome if their marriage does not stand the test of time.
Source: Forbes, “Why a Prenup May Be A Woman Entrepreneur’s New Best Friend“, Jenny Odegard, Aug. 2, 2017