If you are the sole owner or even a partial owner of a business in California, you should always be aware of the ways in which you can protect your company. If you get married, even after you have established your business, you may be wise to create a strong prenuptial agreement so that you do not end up losing some or all of your business in a divorce. If you create a business once you are already married, a postnuptial agreement may be able to help you.
As explained by Forbes, with or without a marital contract in place, there are steps you can take to avoid seeing all of your hard work be washed away along with your marriage. The importance of keeping your personal financial transactions and your professional financial transactions separate cannot be stressed enough. Any comingling of assets opens the door to allegations by your spouse that some portion of the business assets are also marital assets.
A prenup or a postnup may outline various options for your business in a divorce. One of these could be a buy-out clause. Another option is to outline a certain portion or percentage of the business that would be a deemed marital asset. You may also be able to stipulate that your business is completely yours and is separate, not marital property.
This information is not intended to provide legal advice but is instead meant to give residents in California some ideas about how they could plan ahead to avoid disaster with their business should their marriage ever end in divorce.
