A morbid thought as I’m sitting here blogging on the date of my wedding anniversary . . . but what would happen to my business if I got divorced? (I know the answer. What if it happened to you?)
Many business owners spend years of their lives trying to build a business, only to find that their spouse (or soon-to-be ex-spouse) wrenches it out of their hands, and they’re left with nothing to show for their years of hard work. For those who have started a company but not yet married, there are ways to protect it in a prenuptial agreement. (Or, depending on the laws of your state, with a post-nuptial agreement after you’ve married).
People shy away from prenuptial agreements for similar reasons (I think) that they shy away from business partnership agreements: They’re afraid that preparing one will jinx the relationship, and they don’t want to spend the money because they’re convinced that nothing will go wrong. “We’re in love.” Yup, so were the other 40 percent to 50 percent of couples who are now divorced.
Similar to furniture, cars and real estate, you can provide that what you brought to the marriage will be yours to take from it, should the big “D” arise. In many states, you have a much stronger claim to your educational degrees (and the earning power that results), investments and business assets if you created/accumulated them before marriage rather than during marriage (when it’s often seen as marital property, and should be shared). You may also be able to protect the increased value of those assets over time.
I know this sounds horribly clinical and detached. But not long ago a marital relationship was viewed to some degree as a business proposition and a property exchange. Traditional Judaism, for instance, has long instituted the ketubah, a form of premarital contract that was designed to ensure that the wife (usually entrusted with the running of the home and not earning her own money) would be provided for in the event of divorce.
I have a prenup. It doesn’t mean that I love my husband any less or that I don’t want to share the financial successes of my company. But I want that sharing to be on my terms, because I willingly give it and bring that to the relationship. Not because I have to. Raising the subject with my husband (then my fiance) was v-e-r-y difficult and awkward for me. (And I’m blessed that he was understanding and reponsive.) But it also gave me important training in raising tough topics with him–and plenty of those arise in marriage. We faced the issue head-on, discussed it, hired the lawyers, resolved it quickly and filed the document away. At most, the process took a little more than a month.
Consider it. You get insurance to protect your health and your belongings; why not a prenup to protect your business assets? There’s no harm in consulting with a matrimonial attorney in your state. You may well find that having these conversations with your “intended” about your expectations brings a well-needed clarity to your relationship that wasn’t there before.
This entry was posted on Wednesday, May 28th, 2008 at 9:29 am and is filed under Business Planning, Family, Partners and Alliances. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.Leave a Reply
