Our Experienced Family Law Attorney Discusses Prenuptial Agreements for Entrepreneurs

Being an entrepreneur and owning your own business can be an exciting career goal. Many people embark on an entrepreneurial journey, hoping to bring their vision, ideas, and dreams to fruition. If starting your own company excites you, it’s important to understand the risks involved, too. One of those risks is losing your company because you didn’t have a prenuptial agreement before you got married.  Prenuptial agreements for entrepreneurs

The family law attorneys at Alatsas Law Firm understand the importance of having a prenup to protect your business assets should you ever divorce. If you have your own business or plan to have one in the future, our skilled legal team can help you create a prenuptial agreement to safeguard your business for the future.

What Is an Entrepreneur?

Being an entrepreneur generally means working for yourself instead of being an employee of a company. Whether you are starting your career as an entrepreneur or transitioning to becoming one after working for others, there are many important things to consider. When creating your own company, it’s critical that you protect your business assets—in case you get divorced, and especially if you partner with other professionals. 

What a Prenuptial Agreement Means for New York Entrepreneurs

A prenuptial agreement is an agreement entered into before getting legally married to someone. While nobody goes into a marriage planning for it to end, divorce happens, and planning what will happen to your assets in the event of a divorce is smart.

Details of a prenuptial agreement can vary and depend on the assets you bring into the marriage and how you will protect them in the future. If you work hard to build a business over many years, you may not want to sell the business or split the assets with a former spouse.

What’s Included in an Entrepreneur’s Prenuptial Agreement

An experienced family law attorney knows how to draw up a prenuptial agreement that protects the business assets of an entrepreneur. It’s important to consider how much influence or ownership your spouse might one day be able to exert over those assets if you divorce.

If you’re an entrepreneur and meet with a family law attorney, you should discuss the language in your prenup that will protect the following: 

  • Your ideas, including intellectual property that belongs to the business
  • Your property, including personal property you currently own and property that belongs or might one day belong to your business
  • Your ownership of any business, including how much of a business you own, started, founded, or co-founded belongs to you and what role you hold in your current and future business ventures

Why You Should Have a Prenuptial Agreement if You’re a New York Entrepreneur

In some business arrangements, the people you partner with may require you to have a prenuptial agreement. Some types of business contracts will require founders to have protection for the business as an asset, which can include a prenuptial agreement. This is quite common, for example, in family businesses, where family members want to make sure the business stays with family members in the event of a divorce.

Overcoming Objections to a Prenup

Your future spouse may initially object to a prenuptial agreement or say that you don’t need one. Some people see this as making plans for an eventual divorce as though it is a foregone conclusion. But it’s important for an entrepreneur to think of a prenup like health or auto insurance: you hope never to have to use it. But should an accident happen or you need to be hospitalized, you could be in a scary financial situation without it.

There’s nothing wrong with creating a prenuptial agreement that gathers virtual dust and is never used because you never divorce. But given current divorce statistics, it’s smart to have a prenuptial agreement in place before you marry, particularly if you are an entrepreneur or plan to become one.