Starting a business is one of the most exciting goals that a Florida resident can undertake. There is virtually no limit to the amount of success that a business can achieve, and the monetary rewards can be truly life-altering. If a divorce takes place, however, business owners can lose a huge portion of that wealth. For those who are concerned about the potential for loss during a high asset divorce, it is important to take precautionary measures as soon as possible.
Handling this need is best addressed prior to marriage, in the form of a prenuptial agreement. A solid prenup will outline how the business will be handled in the event of a divorce. That can help ensure that the hard work of one spouse does not become a windfall to the other if the relationship sours. But what about a business that originates during a marriage, when there is no prenup in place?
Fortunately, spouses can agree to enter into a postnuptial agreement any time after a marriage has taken place. When a new business venture is in the works, both parties can sit down and discuss what would be a fair division of wealth in the event of a divorce. If both spouses are planning to be involved in the operation of the business, then they might decide to split the value if they move toward divorce. If only one partner is going to be involved in the business, then an agreement can be drafted that allows that party to keep all assets associated with the venture.
Forming an LLC or a corporation is another way that Florida spouses can help protect business assets from being lost in a divorce. Documents can be created that specify the connection that a spouse has to the business. That can make a big difference if the venture turns out to be a success and the marriage falters in the years to come. As with so many issues related to a high asset divorce, structuring business and marital agreements is critical to a favorable and fair outcome.
Source: Forbes, “Why a Prenup May Be A Woman Entrepreneur’s New Best Friend“, Jenny Odegard, Aug. 2, 2017