Why should business owners always sign a prenup?

Why should business owners always sign a prenup?

| Oct 12, 2020 | Divorce |

Many couples in Texas are tempted to skip the prenuptial agreement before they get married, feeling that signing one will “curse” their marriage. People may not want to consider the possibility that they’ll get divorced, but if they don’t sign a prenup, they could find themselves facing a tough legal battle if the marriage does dissolve. Here’s why business owners should always sign a prenup before they get married.

Why should business owners sign a prenup before marrying?

If a couple signs a prenup, they may find it much easier to navigate a high-asset divorce if their marriage fails. If the former spouses were business partners, a prenup can dictate how the business will be handled after the divorce. The ex-spouses can decide if they’d both prefer to keep the business, or if one partner will have the option of buying out the other. The prenup can also dictate that they shut down the business and divide the assets between themselves.

If the business wasn’t a joint venture, the owner can use a prenup to protect his or her assets in the wake of a divorce. A prenup can prevent a business owner’s former spouse from seizing a portion of his or her company assets. The prenup can also dictate whether the spouse will be entitled to the accumulated value of the business as it grows over time.

What should a couple do if they don’t sign a prenup?

If a couple doesn’t sign a prenup and later regrets it, they can always sign a postnuptial agreement after their marriage. A postnup is essentially the same as a prenup. It dictates how business and financial assets will be divided if the couple divorces. A postnup can also address issues that might have arisen during the marriage.