Kennedy Law Associates

Using a prenup to protect business assets

One reason a couple might want to create a prenuptial agreement is to protect business assets that one or both parties acquired before the marriage. North Carolina residents might like to know more about safeguarding their businesses in case they divorce.

Marital property may be subject to division between a couple during a divorce. However, a prenuptial agreement allows spouses to determine the assets to which each person has rights. A prenup allows the owner of a company to establish its value when a marriage begins. This allows its worth to be protected as separate property.

Prenups can keep the premarital value of a company from being subject to division, but a couple can also make a plan to address a business's worth during a marriage. Sharing profits and losses with a spouse might be appropriate in cases in which one person makes contributions to the other individual's business or has invested in the company.

When a business valuation occurs, this process can interfere with the daily operations of a company. To avoid this, a couple can plan how they will determine what the company is worth in the event they divorce. Additionally, an agreement could be reached about how to deal with a business owner's income. This is necessary when the owner of a company puts earnings back in the business instead of taking a regular salary.

There are many different considerations involved when business assets are part of a divorce. For example, the contributions a person makes to his or her spouse's business can be direct or indirect. If one party handled taking care of children or supporting a couple while the business was not yet making a profit, he or she party might have a greater claim to a portion of the business's value. An attorney could help someone negotiate for the value of a business.

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