Prenuptial agreements are advisable for just about every couple when they marry. However, if you own a business, a prenup in which you designate your business as separate property is especially important. It can help prevent your spouse from getting a significant share of a business that you built yourself if the two of you divorce.
A prenup is just the first step in protecting your business, however. People too often do things throughout their marriage that essentially invalidate any protections related to their business that they’ve codified in the prenup. For example, don’t put marital assets into the business or let your spouse contribute to or work for the business if you aren’t prepared to share it if you break up.
Even if you have a prenup, your spouse takes no role in the business and you don’t commingle separate business assets with marital ones, a court could decide to grant your spouse a share of the business in a divorce if, for example, he or she has sacrificed a career to care for the children or worked to support you while you built the business into a success.
If you haven’t taken these steps to protect your business, but it’s important for you not to hand over part of it in the divorce, you may be able to reach an agreement with your spouse to forsake other assets, including real estate, retirement accounts, artwork and other valuables in exchange for retaining full control of the company. Your Washington family law attorney can suggest the best options for retaining the business you’ve devoted your time, energy and passion to build if your marriage ends.
Source: TG Daily, “3 Ways to Protect Your Business from Divorce,” accessed May 24, 2017