When young people start businesses in Illinois, they often do not think about marriages or prenuptial agreements. Instead, these entrepreneurs are typically focused on securing startup capital and improving their products. These responsibilities understandably take precedence, but overlooking a prenuptial agreement before getting married can be catastrophic for one’s business if one ends up getting a divorce.
All of the money and time that one person invested in building a business from scratch can become nullified as soon as this person and his or her spouse get divorced. Even if a person starts a business before getting married, the other party may be entitled to even more than 50 percent of any appreciation in the value of the company that takes place while the two parties are married. Debt may also be a major problem, as after two people marry, they share one another’s debts.
Prenuptial agreements are designed to help people to protect their assets, including business assets, in the event of divorce. A prenuptial agreement is a contract between soon-to spouses that classifies assets as marital or separate. One that is enforceable enables both individuals to agree on which assets will be considered premarital, which means they will be exempted from splitting should a divorce occur.
Even if a prenuptial agreement was never signed by a couple in Illinois, a couple going through divorce can still consider divorce mediation or negotiation when it comes to splitting the assets. Through mediation or negotiation, a couple may be able to reach a settlement that satisfies both parties. Proper legal guidance may help both divorcing individuals to achieve their individual goals while still considering the other party’s needs and desires.
Source: business.com, “Divorce Is a Business Threat: Protecting Your Company With a Prenup“, Erik Episcopo, April 1, 2016