You're getting married soon. Amid all the planning - the venue, the guest list, even the color of napkins at the reception - don't forget one thing: An agreement that will protect your thriving Florida business.
Your soon-to-be spouse probably helps you out with the business. You appreciate that and don't want to shut them out should you ever divorce. Still, it makes sense to protect yourself - just in case.
Before your marriage, you can enter into a prenuptial agreement that outlines what would happen to your business in the event of divorce. The document can spell out everything from how a value will be affixed to the business as well as how you could split up your assets.
You could include such statements and conditions as:
- Your business is worth a specific dollar amount at the time of your marriage. In the case of divorce, your spouse will receive 20 percent of the value over that at the time of divorce. So if the business is valued at $10 million on the day you marry and worth $15 million on the day you divorce, your spouse would receive 20 percent of $5 million.
- Your business is nonmarital property and your spouse isn't entitled to a share. This saves you from having to open your books and having the business valued.
If you don't have a prenuptial agreement (or a postnuptial agreement, executed after your marriage), there are still ways to fairly divide the business.
- Complete legal paperwork to declare yourself as the business' only owner, adding that a cash award will be made in lieu of a stake in the business in the case of divorce.
- Keep your personal and business expenses separate. Mixing funds will make it that much harder to figure out whether your business or personal assets were put into the business.
- Maintain a clear ledger that can trace the origin of monies spent on the company.
- If you employ your spouse, pay them the same rate you'd pay anyone else in the position. If you don't, they could ask for a higher stake in the company, saying their sweat equity went into building it.
There are ways to protect your assets and still be fair to your ex-spouse, whether through a prenuptial agreement or other documents executed later. A family law attorney should be contacted to prepare the paperwork.