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How a prenuptial agreement may protect business owners

| Oct 8, 2020 | Family Law |

People who marry generally intend for the relationship to last forever, so talking about the possibility of divorce can seem pessimistic. However, many people in Michigan and across the country find that the failure to have this uncomfortable conversation can have serious consequences in the event that the marriage ends. Business owners in particular often find themselves blindsided by the impact divorce can have on their company. Fortunately, experts have advice about getting a prenuptial agreement for those who have concerns.

A prenuptial agreement is a legal document signed before marriage that outlines how shared marital assets will be divided during a divorce. This might include part of a business, often in the form of stock or a share in the business itself. It is particularly useful for those who already have an established business when they marry, but for those who create a business or have a significant change in their finances after marriage, a postnuptial agreement can serve a similar purpose. The idea is that the possible division of a business will be planned out when emotions may not be running as high as they often do during the divorce process.

Some points business owners may want to include are whether the business will be shared property, the value of the business before marriage or the non-business owner spouse’s role in the business, if he or she has one. The distribution of assets may also be impacted by choices around the business owner’s salary, the usage of marital funds for capital, or the process of valuing the business. The agreement can and should be detailed, to cover as many factors as possible.

Whether an agreement is signed before or after marriage, an attorney can help business owners determine what needs to be included. Here in Michigan, an experienced family law attorney may be the best person to create a prenuptial agreement for those in need of one. That way, all parties involved can have reassurance that the divorce settlement will be handled fairly.

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