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Prenuptial agreements can protect future businesses

People who have an ownership stake in an established business when they get married typically are advised to get a prenuptial agreement to protect their share of the business should they divorce. However, even if your business idea is still a dream, you should protect it with a prenup.

As one family law attorney notes, "Maybe you have no money, but you have a lot of potential down the road. That is something you cannot protect without a prenuptial agreement." However, as she explains, that can be "tricky" because you can't put a value on something that doesn't exist yet.

Sometimes, when an entrepreneur is seeking investors for their company, those potential investors will require that person to have a prenup that addresses the business in order to protect their interest in it.

If you don't have a prenup in place that addresses the business or future business you're bringing into the marriage, your spouse could be forced to buy out their spouse's share of it. Since California is a community property state, a business could end up being split in half, even if one spouse had no role in building or running it.

You could use the prenup to designate that your spouse will receive a share of the business if you divorce. Some people choose to do that because even if the other spouse isn't directly involved in the business, they may have made sacrifices that allowed their husband or wife to establish and grow the company.

Whether your business is up and running or still a gleam in your eye as you prepare to marry, it's essential to talk with a California family law attorney about protecting it as well as other assets with a solid prenuptial agreement should you and your partner not live happily ever after.

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Law Offices of Indu Srivastav, APLC
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