Very few people intend to get a divorce after they first get married. However, couples in New Jersey and other states are becoming increasingly aware that setting up a prenuptial agreement can be a smart move. This is especially true when one or both of the spouses own businesses before getting married. To avoid having a business end up as marital property subject to division and distribution during a divorce, a prenup will clearly state who owns what assets.
The first step in this process is to figure out the value of the business before the marriage begins. This value can be protected with a prenup, but any additional value the company gains during a marriage may be subject to distribution. In addition, the prenup can detail if a spouse will share in the profits or losses of a business. This could depend on how much the spouse plans to directly or indirectly contribute to the business.
In many cases, the owner of a business will choose not to take a salary and instead divert those funds into the company. This could reduce the overall value of marital assets, and deciding how to compensate for this should be addressed in the prenuptial agreement. The ultimate goal should be to make sure that assets are fairly distributed to both spouses.
When a business is involved in a divorce, it’s important for each party to get support and guidance from an attorney. Whether or not a prenuptial agreement was made before marriage, it’s the responsibility of a lawyer to make sure the financial interests of the client are well represented. In some cases, the arrangements made in a prenup can be disputed, and resolving these disputes may require going to trial.