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TX divorce lawyerAlthough prenuptial agreements are not something that business owners typically think about when they become romantically involved with another person, the reality is that making these types of considerations is extremely important for those who are considering marriage. Entering into this type of contract before a marriage takes place can give both parties peace of mind, while also ensuring that a company’s assets are protected in the event of divorce. For help drafting or enforcing your own prenuptial agreement, please contact an experienced high asset divorce attorney who can assist you.

Owning a Business Prior to Marriage

If a person owns a business going into a marriage, then those assets will most likely fall under the category of separate property in the event of divorce. However, any growth in value and earnings stemming from the business can and probably will be considered community property, which means that if a couple decides to divorce, the original business owner would need to split those earnings down the middle. Furthermore, if the spouse who didn’t originally own the business ended up substantially contributing to it during the marriage, then that business interest could be considered commingled with the couple’s community property and so converted into marital property for the purpose of division upon divorce.

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Austin family law attorney, prenup, prenuptial agreement, pre-marital property, financially disastrous, planning your wedding, prenups and business, property division settlementDividing up marital property and assets during a divorce can become difficult if one of the spouse's owns a business. That business may be one of the most important assets in the marital estate, especially if it is a successful one. Ideally, if the business was started before the marriage, the couple should draw up a prenuptial agreement that includes specific details regarding the business in the event of a divorce. However, if a prenuptial agreement is not drafted, a divorce could become increasingly difficult and potentially financially disastrous for one spouse or the other if the marriage fails.

For example, one couple going through a divorce, did not have a prenup, and thus put the husband's corporation at risk. Shareholders were left to wonder what would happen to the company. Said husband is currently worth $14.6 billion and is listed in Forbes Magazine as a global billionaire. He also owns 126 million shares of his company, giving him 70 percent ownership.

The judge overseeing the divorce stated that just over 122 million of the shares the husband owns were acquired prior to his marriage and are therefore considered "pre-marital property" and will not be part of any property division settlement. However, the remaining 4 million shares will not be covered by the judge's order.

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8911 N. Capital of Texas Highway, Building 2, Suite 2105, Austin, TX 78759