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Specialty tag(s): Prenuptial and Postnuptial Agreements, Divorce for Business Owners, Divorce

How Do Prenuptial and Postnuptial Agreements Protect My Business?

Angel J. Berbarie | October 18, 2023

A wedding is a special and joyous occasion. Unfortunately, the happiness of that day doesn’t always last forever, with nearly half of marriages ending in divorce. If you’re a business owner, that’s a statistic that might give you pause. You should be able to feel confident that the business you’ve built will be secure in the event of divorce. The protection of a prenuptial or postnuptial agreement can ensure your business and financial interests are safe during a divorce.

How Do Prenuptial and Postnuptial Agreements Work?

Prenuptial agreements, also known as “prenups” or premarital agreements, are contracts you and your partner enter into before marriage. Postnuptial agreements, on the other hand, are created after marriage. Each legal document specifies how to divide a couple’s assets in the event of a divorce.

Specifically, regarding businesses, a prenuptial or postnuptial agreement can clarify the ownership interest of a business as well as the terms for division of that interest in a divorce. By signing a prenuptial or postnuptial agreement, you can ensure a certain level of protection for your business interest if the marriage ends.

What Impact Will a Prenuptial or Postnuptial Agreement Have on the Division of My Business Assets?

The specific impact that a prenuptial or postnuptial agreement will have on the division of business interest will depend on the terms outlined in it. Generally, a prenuptial or postnuptial agreement can designate your interest in a business and its assets as separate property. This characterization ensures that control of the business and its assets will remain with you following a divorce. It’s important that the prenuptial or postnuptial agreement is carefully drafted with the help of a skilled and experienced family law attorney to ensure enforceability of the agreement.

What Are the Potential Implications of Prenuptial or Postnuptial Agreements for My Business and Financial Interests?

Prenuptial and postnuptial agreements do more than prevent the division of business interests during a divorce. These documents may include provisions relating to several business matters, such as:

• Business Continuity: These agreements can ensure that a business continues to operate smoothly and efficiently during and after a divorce by specifying how to handle ownership, management, and control.
• Income Distribution: Prenuptial and postnuptial agreements can help prevent legal disputes over financial matters by outlining how to distribute income the business generates following the divorce.
• Intellectual Property Rights: Intellectual property concerns can be alleviated by prenuptial and postnuptial agreements that outline the ownership terms of any intellectual property created by a business during the marriage.
• Business Valuations: Prenuptial and postnuptial agreements can establish a method and framework for business valuations to determine asset value in the case of asset division.
• Buyout or Sale: Prenuptial and postnuptial agreements can provide a mechanism for one party buying out the interest of the other party or can
  provide terms for the sale and distribution of sales proceeds of a jointly owned businesses.
• Non-Compete and Non-Disclosure Agreements: Prenuptial and postnuptial agreements may contain clauses that prevent spouses from competing with the business or divulging sensitive information to third parties during or after the marriage.

Should I Consider Seeking a Prenuptial Agreement for Any Future Relationships to Protect My Business?

If you’re a business owner, discussing a prenuptial or postnuptial agreement with your spouse is a wise decision. These agreements provide essential protection for your business interests and allow you and your partner to discuss your financial expectations, assets, and ownership. While it may not be a romantic conversation, open communication can help you build a healthier, more secure, and longer-lasting relationship.

Contact a Prenuptial Agreement Attorney at Goranson Bain Ausley Today

Whether you already own a business or are planning to start one, the prenuptial and postnuptial agreement lawyers at Goranson Bain Ausley are here to help. Our firm has extensive experience drafting and reviewing these agreements and can provide the necessary guidance to help you decide if it’s the right choice for you. Contact us online or reach out to one of our attorneys in Austin, Dallas, Fort Worth, Granbury, or Plano today.

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Angel Berbarie offers high-level experience in drafting prenuptial and postnuptial agreements. She is skilled in solving challenging financial and child custody issues, including divorces where the parties have interests in businesses, and significant retirement, or investments to be divided. Angel is Board Certified in Family Law by the Texas Board of Legal Specialization, has been selected to Texas Super Lawyers, Thomson Reuters, 2022-2023, and has been recognized as a “Best Lawyer” in family law by U.S. News-Best Lawyers in America, 2021-2023.

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