Virginia business owners who are planning on getting married might want to consider a prenuptial agreement. It can establish the value of the company going into the marriage as separate property. This helps ensure that the spouse who does not own the company is only entitled to a portion of whatever value the company gains after the marriage.
Since valuation can be a time-consuming process, the couple might want to agree on how to assess what the company is worth in the event of divorce. The prenup should also address the role of the non-owner spouse. For example, one who works for the company and is paid market rates might claim a smaller percentage of the company’s value or none at all in a divorce compared to one who works at below-market rates.
If the owner is also paid at lower rates in order to keep more money in the business, this may be taken into consideration as well, since this means less money going into savings and other marital assets. The couple should also agree on how a spouse who did not work for the company but ran the household and raised children should be compensated in the divorce. The prenup may specify a percentage of the business the non-owner spouse will receive that differs from how other marital property is divided.
People who are considering a prenup or whose spouse-to-be has asked for a prenup might want to consult an attorney. Prenuptial agreements are not supposed to put one person at a greater advantage than the other but should protect both individuals. Both people should receive sufficient legal counsel to understand the provisions of the prenup. The prenup should be discussed, prepared and signed well before the wedding or it could appear as though one person pressured the other into signing it.