An agreement with your spouse can protect your business

On Behalf of | Nov 16, 2022 | Prenuptial Agreements |

Starting a business during a marriage is a bit of a gamble. You may reduce or eliminate one spouse’s contributions to the household, putting a lot of stress on the other.

The entrepreneur spouse could very well end up working 80-hour workweeks and feeling so exhausted that they can do almost nothing at home. Housework and even the relationship with their spouse may fall to the wayside until the company is off the ground and turning a profit.

The company itself is also at risk if you start it while already married, as it could be subject to division in divorce proceedings. You could build a successful company, only to have to dismantle it to pay your spouse half of its value in the divorce. Negotiating a postnuptial agreement can be a smart move for those about to start a new business.

Postnuptial agreements protect both spouses

Like any other contract, a postnuptial agreement has to offer something of value to both parties. You may want to designate your business as separate property so that you don’t have to divide it in a divorce or can at least reach an agreement with your spouse about how you will share its value so that the company itself will never be at risk.

Whatever approach you take to the process, you will need to also enshrine protections for your spouse and some concessions that you make to them in the agreement. A mutually beneficial postnuptial agreement gives the two of you a chance to establish the outcome of a divorce that may never occur.

If your marriage eventually goes through a difficult time and one of you files, you won’t have to face the expense and embarrassment of family court litigation. A postnuptial agreement can lead to a quick and relatively private uncontested divorce filing. You will be able to protect your business and keep the stress involved in the end of your relationship to a minimum.

Postnuptial agreements help marriages

If the two of you have to have a long discussion about what would happen when you divorce and what both of you expect in the near future as you start the company, it will be easier than you might expect for the two of you to better align your expectations for one another in your relationship.

Honest communication can go a long way towards stabilizing and preserving a marital bond, and a realistic idea of what divorce would mean for your family can also help stop someone from making an impulsive choice with permanent consequences. Negotiating a marital agreement with your spouse can be a very smart move for those who own a business or hope to start one.


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