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Prenuptial agreements can be ideal for business owners

On Behalf of | Jul 29, 2019 | Divorce

Couples in Arizona and throughout the country have warmed up to the concept of the prenuptial agreement in recent years. These documents can be especially beneficial to those who own a business. With a prenuptial agreement, a couple can determine whether to classify the company as marital property or create a custom label for it.

The terms of the agreement may establish how much the company was worth at the time of the marriage. This amount generally cannot be split in a divorce proceeding. Therefore, a business owner can protect the equity that they built before entering into a union.

An agreement may also determine the type of compensation a spouse could be entitled to if the marriage were to come to an end. For instance, a spouse who collected a salary from the business may be entitled to little or nothing more in a divorce. In the event that a business owner is not taking a salary, a prenuptial agreement could impute a reasonable income that would be split if a divorce took place. In some cases, it’s possible to simply hand over an equity stake in the firm that could be liquidated or used as collateral for a loan.

Creating a prenuptial agreement with the help of a lawyer can resolve many or all potential property division issues prior to the marriage taking place. This could make it easier to come to a divorce settlement in a timely and amicable manner. Doing so would be ideal for business owners who want to eliminate distractions that a divorce could create. It may also be ideal for parents who want to protect the best interests of their children.