Photo of Professionals at McCoy Fatula, APC
Photo of Professionals at McCoy Fatula, APC

Prenup important for business owners in divorce cases

On Behalf of | Aug 18, 2017 | Divorce

Many California residents and others around the country are going into business for themselves. Whether developing a product or offering a service, more and more people are embarking on start-up business ventures. Married or engaged couples often work with each other as the new company gets started. While a common practice, this interaction could lead to complications should the couple get a divorce.

Marriage experts suggest that engaged couples sign a prenuptial agreement, particularly if there is a business involved. If the business is designated as separate property, it is protected, even if a spouse contributes to its operations. On the other hand, married business owners should consider a post-nuptial agreement. The same provisions of protection can be included; however, the document is signed after marriage.

It is also important to structure the business properly. Include a provision that determines how company issues will be handled should the marriage end. Some possible issues that may be addressed in a provision might include spouse voting rights, selling to third parties or limitations on acquiring ownership.

Experts also suggest that, if a spouse is not already involved in a business, keep it that way. There is nothing wrong with the business being a personal interest of one spouse. Business owners should keep their company finances separate from their marital finances. If joint funds are used to support the business, the spouse could claim a portion in a divorce.

The divorce process can be complex. If one or both spouses own businesses, the complexity is even greater. A California divorce attorney can help clients understand the process and develop a plan to protect one’s interests in the proceedings.

Source:, “Why a Prenup May Be A Woman Entrepreneur’s New Best Friend“, Jenny Odegard, Aug. 2, 2017

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