Congratulations on your engagement! Undoubtedly, you have a long list of tasks to accomplish before the big day, including planning your honeymoon, ordering cake and flowers, and perhaps writing your own vows. Meanwhile, you still have a business to run.
Perhaps the idea of how your marriage will affect your New Jersey business has only tickled the back of your mind, or maybe you lie awake at night terrified of the possibilities. The history of your business likely includes many sacrifices on your part, and the thought of putting it on the line, even for the love of your life, may be a hard pill to swallow. Regardless of whether you like or dislike the idea, a prenuptial agreement may be the surest way to protect your business.
Important points to consider
No one wants to think of the end of a marriage. Nevertheless, you can't see the future, and your diligent preparation for such contingencies is essential. Even if you started your company long before you marry, any appreciation of the business during the marriage may be marital property and fair game for division. You may know other entrepreneurs who lost their businesses through property division in a divorce. If you divorce, your spouse may be entitled to half of your business.
For your prenuptial agreement to be successful, the following considerations will be crucial:
- Agreeing that your business assets and appreciation will not be part of property division
- Considering similar stipulations for other assets you bring to the marriage
- Relieving each other of the burden of individual debt incurred before or during the marriage
- Convincing your business partners to establish prenuptial agreements with their spouses since their divorces could wreck the business as easily as yours
The protections you afford yourself through a solid prenuptial agreement extend to your employees since any threat to your business is a threat to their livelihood.
Strengthening your agreement
Once you have signed your contract and married your intended, it will be important to exercise scrupulous separation of your business from your personal finances. Accurate and thorough record keeping will not only demonstrate your earning power prior to the marriage, it will also prove that your marital and business finances never mixed. Additionally, allowing your spouse to contribute in any way to the running of the business could weaken your agreement.
To ensure your prenuptial agreement holds up at the most critical time, it is advisable that you and your partner have separate legal counsel. Sharing an attorney during the preparation of your agreement may invalidate the enforceability of your contract.