Prenuptial for a Small Business Owner: To Do or Not to Do?

When two people decide to spend the rest of their life together and decide to tie the knot, there are some important issues that should be addressed, especially if one of them is a small business owner. Sometimes you hear the work prenuptial and think no way, I am not getting married if I have to sign one of those. The fact of the matter is, a prenuptial is not a bad idea at all for both parties involved. Most people don't realize exactly what a prenuptial is or how it works.

A prenuptial, commonly called prenup or prenupt, is a contract between two individuals that is established and signed before entering into a marriage or civil union. A prenuptial can include a vast amount of information but as a general rule it discusses the division of property and spousal support should the marriage dissolve for whatever reason. Every prenuptial in the United States must have 5 key components in order for it to be legally binding.

1. A prenuptial must be written
2. The parties must voluntarily sign the agreement
3. There must be a full and fair disclosure of all information at the time the prenuptial takes effect
4. A prenuptial cannot be unconscionable
5. The prenuptial must be signed by both individuals involved in front of a notary.

For small business owners, a prenuptial should be considered to protect the business that was theirs from the beginnings. Small business often take long hours of work establishing from the ground up. If you spend hours and years of your life making a business work, love may not be enough to make you want to share half of what you worked so hard for, especially if the differences were not from anything you did wrong. Love can sometimes make people blind, but a prenuptial only protects the interest and time you put into developing your business. If your significant other truly loves you, they will understand the interest in your business is not personal, but only a wise business decision.

Many individuals believe prenuptials are only for those who have an over abundance of monies. While in fact many prenuptials are signed by the wealthy, if you have spent countless hours building a business it would be worth just as much to you as it would be to someone who had millions of dollars. Prenuptials are important to everyone that has something large to loose from a marriage gone bad. This day and age there are many factors to consider when thinking about getting a prenuptial. The fact is more than 50% of marriages end in divorce.

Prior to considering a prenuptial agreement there are a few things you should consider. When in the considering stage, know that you must be completely honest with your partner about all your financial assets. Withholding even the slightest information can cause the agreement to be invalid. Make certain to put everything you want to include in the prenuptial in writing. Make sure to be very specific with wording and division of property. Make sure the agreement is fair. Be sure to include clauses in your prenuptial. An important clause to include is for example if anything in the agreement is altered, the remainder of the prenuptial will still be valid.

In order to insure you have a prenuptial that will stand up in court, it is a wise idea to hire a lawyer to look over the agreement. Just let the lawyer have the chance to make sure you have dotted your I's and crossed your T's so you can be confident that your small business is protected in the event the marriage fails. Hopefully the two of you will last forever, but just in case something happens, be prepared. Entering into a prenuptial agreement helps preserve the future of your small business.