Creating a prenup when one party owns a business

A prenuptial agreement can help a Massachusetts couple outline how they will handle a business owned by one of them in case they divorce. One thing a prenup can do is establish the business's value at the time of the marriage. This information will allow the couple to determine how much the business has appreciated during the marriage if they get a divorce and divide its value based on that appreciation.

The couple may also want to decide what they will consider an acceptable method of determining the company's value if they get a divorce. The full process of business valuation can be costly, disruptive and time-consuming, but it can be avoided if they agree on another approach. Next, they should think about compensation. If the owner is drawing a salary that is less than market rates so the business will have more money, this means less money to put into savings or other joint property. This could affect how property is divided in divorce.

Funding the business is another consideration. If shared marital assets are used to finance it, this could also affect how the value of the business is divided.

Without a prenup, couples who divorce may need to consider these same issues. The difference is that negotiating them may be more difficult because emotions could be running high. Similar issues may arise if a couple owns a business together. In that case, they may need to decide whether one spouse will buy the other out or if they will sell the business to a third party. Middlesex County, Massachusetts, divorce lawyers may help negotiate a settlement agreement that takes into account a business.

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