What happens to businesses in divorces?

On behalf of Stange Law Firm, PC posted in divorce on Monday, April 3, 2017.

When Missouri business owners are planning to marry, there are important reasons why they might want to consider entering into prenuptial agreements with their fiances in order to protect their business interests. If couples get divorced without agreements that address how one spouse may leave their companies, they risk losing their companies all together in their divorces.

One case that has been happening in Delaware involving the translation software company TransPerfect illustrates what can happen when couples do not have agreements in place about how their business interests will be handled in the event that they divorce. After the co-owners split up, they were unable to get along well enough to manage effectively and wound up suing each other in court. The state legislature has now intervened in order to try to save the business as it employs 3,500 people.

Similarly, a woman in Louisiana who started her own online business was forced to buy it back from her ex-husband. A family court judge awarded the business to her husband in their divorce.

Prenuptial agreements may be used to define which spouse will receive different asset classes in the event that their marriages end in divorce. While businesses that were separately owned by a spouse prior to the marriage are generally his or her separate property, any increase in the value of those companies may need to be divided. By addressing this in prenuptial agreements, business owners may retain full ownership of their companies following their divorces. Business owners who are already married may draft antenuptial agreements in order to obtain similar protections. Family law attorneys may advise their clients about drafting legally valid prenuptial and antenuptial agreements that may provide the protection that their clients need.

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