The business that you run can be worth as much as your family home, if not more. Between the income it generates and the assets you have purchased for the company, a business can represent hundreds of thousands or even millions of dollars.
If you plan to file for divorce, it is only natural to worry about what will happen to your business and its assets during that process. If you go through a contested divorce, your spouse may be able to claim some of the company’s value, which might complicate your divorce.
If you currently have worries about your marriage or if you want to protect a business that you have started or intended to start while married, sitting down with your spouse to draft a postnuptial agreement can protect your company and give you both a better idea of what will happen in the future.
How does a postnuptial agreement work?
Much like the slightly more common prenuptial agreement, a postnuptial agreement allows spouses to set their own terms for their marriage and possible future divorce. You might list certain property as separate, meaning it isn’t subject to division in a divorce. Other times, you might instead sit down to create a workable, detailed arrangement for distributing your property in the event of a divorce.
If one of you does decide to file for divorce in the future, the terms that you set in the postnuptial agreement will dictate the outcome. You can file for an uncontested divorce, which is faster and cheaper than a contested one.
Postnuptial agreements aren’t just for those considering divorce
You don’t have to be on the cusp of marital dissolution to create a postnuptial agreement. Couples often decide to draft these contracts preemptively when one spouse experiences unexpected degrees of professional success or receives a large inheritance. Anyone who has an interest in protecting complicated assets or possibly creating more structure for their marriage going forward could benefit from a postnuptial agreement.
If you worry about your business because you want to divorce or if you want to start a business but don’t want to risk losing it, asking your spouse to create a postnuptial agreement with you could be a solid solution.