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Prenuptial agreements to protect business owners

People in Massachusetts who are getting married may not want to think about the possibility of divorce, but for business owners, it may be a wise choice. The difficulty of a divorce can be exacerbated by the financial issues that arise for business owners. A prenuptial agreement is one way that a business owner may steer clear of those complications.

There are several points a business owner should keep in mind when putting together a prenuptial agreement. Even if the person owned the business prior to the marriage, the spouse can claim half of the appreciation that took place while the couple was married. A prenup can exempt this from the marital assets as well as the appreciation of any other assets. A prenup can also state that neither spouse will take on the debts of the other. Furthermore, the agreement can also detail how mutually acquired debt will be split in the event of divorce.

People who are not the sole owners of a business may also want to discuss having their partners sign prenups with their spouses. Otherwise, the former spouse of a partner who gets divorced might own part of the company or receive some assets. Both the company itself and individuals should keep careful records so that financial matters are not in doubt.

A prenuptial agreement can be challenged in court, and there are certain aspects that may make it more vulnerable to that challenge such as if it is signed on the eve of the wedding. This could indicate that the agreement was signed under duress. Furthermore, a prenup can only deal with financial arrangements and not child custody or other issues. A person who is challenging a prenuptial agreement or one who is facing a challenge may want to discuss the situation with an attorney.

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