Prenuptial Agreement – Divorce Proof – Protecting Your Business in Divorce

If you or your spouse are thinking of obtaining a divorce, and you own a business, you need to be concerned. In New York, businesses are subject to divorce property law known as equitable distribution:  if the business was acquired after your marriage, it is fair game in divorce for distribution of a share of its value to your spouse. Unless you want to share your business with your ex-spouse, then you will need to consider options and strategies for keeping the business as separate property.

What can you do to protect yourself?

In advance of the marriage, obtain a prenuptial agreement. This is a contract between the couple that the business will remain separate property after the marriage. In any valid prenuptial agreement, there must be full financial disclosure — both of you need to know the full extent of each others’ assets before signing. You both need to be in full agreement, and you can’t coerce your significant other into signing it.  There are strict formal requirements for doing a prenuptial agreement, and if it is not done correctly it won’t hold up in court.

If you are already married, it’s still not too late. You can obtain a postnuptial agreement. It’s similar to a prenuptial agreement, but both spouses enter into it after the marriage.

There are also other ways to protect yourself as well. When you are ready to obtain a prenuptial or postnuptial agreement, or to find out how else to protect your business and keep it separate, so that it does not become a marital asset, we can help.

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