Business owners may want to protect their assets from divorce

Many New Jersey couples are getting married this summer, and most of them have high hopes for the future. For most young couples, it doesn’t seem possible that their marriage could end in divorce. However, it is best to be prepared for all scenarios.

Whether they started the business before or during their marriage, some business owners neglect to consider how a divorce will affect their business. Without a prenuptial agreement, a spouse who was never involved in the business may be eligible to receive a significant portion of the business. These circumstances can have a tremendous negative impact on the business, and it could drive the owner’s business partners away from the company.

Thankfully, a prenuptial or postnuptial agreement protect business assets in the event of a divorce. For people who start a business after they get married, a postnuptial agreement will protect the business in the same way that a prenuptial agreement does. New Jersey is not one of the nine community property states; rather than just giving 50 percent of the assets to each spouse, the state divides a couple’s marital assets based on a variety of factors. With both types of agreements, the business assets will be divided based on how much each spouse contributed to the business.

It can be difficult for brides and grooms, or married couples, to broach the subject of a prenuptial or postnuptial agreement, but doing so could later prove to be a wise decision. For engaged couples, it is best to start the process at least six months before the wedding date. Working with an experienced attorney can make this process easier for couples.

Source: Entrepreneur, “Why Rupert Murdoch’s Divorce Is a Wakeup Call for Business Owners, Leah Ingram,” June 17, 2013