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Prenups important for business owners

Tech startups are a major driver of the economy in California and across the country. Like other closely held businesses, startups have founders who may have good reason to be careful when deciding to marry. A prenuptial agreement can be an important step for people in the tech industry and other fields who are staring their own businesses, even if their firms are relatively small or still in the idea stage. In California, property acquired during marriage is assumed to belong equally to both spouses under the principle of community property. However, a prenuptial agreement is one way that couples can make clear their own plans for how to distribute their assets.

Prenups were once mainly considered a matter for the ultra-rich or celebrities. However, given the proliferation of startups and other small businesses, many more people are considering the value of prenuptial agreements. A divorce years down the line might not only interfere with one partner's wealth obtained through a business; it could also undermine the business' ability to function, especially if the company grows much larger over time while the founder retains a controlling stake in the firm. A prenuptial agreement can set clear boundaries around how a business belonging to either spouse would be handled in the case of future property division.

This isn't a matter only of concern to the future spouses themselves. Angel investors and venture capital firms may want to see that a clear prenup is on file before they invest in a startup. They don't want to put their investment at risk in case of a future divorce.

Business owners have a number of unique concerns when they decide to marry or divorce. A family law attorney may advise a startup founder about prenuptial agreements and how they can help to protect the company.

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Law Offices of Catherine A. Schwartz
6877 Magnolia Avenue
Riverside, CA 92506

Phone: 951-335-0510
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