Untangling business assets is often a difficult and contentious part of property division negotiations. Florida’s equitable distribution law requires marital assets to be divided fairly but not necessarily equally in a divorce, and business interests are treated no differently to real estate, cars or investments. Some divorcing business owners believe that they do not have to worry about any of this because they started their companies long before they walked down the aisle, but this is not the case. While the business itself would not be subject to division in this situation, any growth it experienced during the marriage would be considered part of the marital estate.
One way to protect business assets during a divorce is to draft a prenuptial agreement that makes the value of the company prior to the marriage clear and states how any appreciation or depreciation will be treated. If one of the spouses is seen as being crucial to the company’s future success, it may be difficult to attract investors or secure financing without a prenuptial agreement. When businesses are established during a marriage, spouses can determine how they will be divided during a divorce by drafting a postnuptial agreement.
The provisions of a prenuptial agreement should be fair as these documents are of little practical use if they are unlikely to withstand the scrutiny of a judge. They must also be entered into willingly and negotiated in good faith. This means that spouses should be adequately compensated for any marital funds that were invested in the business and any contributions they made during the marriage. Drafting a fair prenuptial agreement reduces the chances of the document being challenged in court.
If you own a business and are planning to get married, an experienced family law attorney may draft a prenuptial agreement that protects your interests and provides peace of mind for both you and your future husband or wife. An attorney may also suggest that you revisit your prenuptial agreement from time to time so that revisions can be made to reflect your changing business and financial situations.