As a business owner in Tennessee, having a prenuptial agreement determines what business assets can become marital property. Having this plan in place prior to marriage can prevent conflicts in the event of a divorce. Even though no one enters into a marriage thinking about divorce, it is wise to prepare for the unexpected.
According to Forbes, a prenup helps determine how business property and assets get distributed during a divorce. It provides a clear picture of your profits and losses. The court also takes into account any indirect and direct contributions your spouse makes in the company before and during the marriage. When dividing business assets during divorce proceedings, the court also takes into account the value of your company prior to your marriage.
Prenuptial agreements give you greater control over how your business assets get distributed to your spouse. Without a prenup, your spouse could possibly get 50% of your company. If you want to avoid that level of distribution, you can stipulate a specific percentage in a prenup. For example, if you set aside 10% of the business for your spouse that is all he or she can receive at the time of divorce. Typically, the percentage gets based on the premarital value of your company.
Your business income is another asset you can address in a prenuptial agreement. It can protect your market-appropriate salary from divorce distribution. A prenup even protects your business savings. A pre-marital agreement sets parameters on how much, if any, of your business income and/or savings gets divided with an ex-spouse.
While this information is not legal advice, it can help you understand the benefits of prenuptial agreements and what to expect.
