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Can a prenup protect your business?

On Behalf of | Apr 4, 2022 | Divorce

Your wedding day is one of the most exciting moments you’ll have in life. You and your partner have prepared for a life together. While there is every chance that your partnership will work out, the reality is that around half of all marriages end in divorce.

A prenuptial agreement is commonly misconceived as accepting failure before the marriage has commenced. It can also be viewed as a sign of mistrust. However, these misconceptions are not based on reality. The truth is that prenuptial agreements initiate a flow of open conversations between partners. They provide a means of being honest about finances, which can prevent arguments later on.

A prenuptial agreement is a useful tool for protecting your business interests, and here’s why:

Establishing ownership

By utilizing a prenuptial agreement, you can fully establish your rights as owner. Property distribution in Iowa operates on the basis of equitable distribution, which means that assets or profit shares acquired during the marriage will be classified as marital property. This means that your spouse could claim their share of business proceeds during a divorce. They may even be entitled to a share of the ownership. A prenuptial agreement provides a way to make sure that the business stays solely in your name.

Protecting your employees

By establishing your rights as the owner, you are protecting your business, which in turn means shielding your employees from any blowback resulting from the divorce. Ensuring that your business remains intact not only allows you to benefit from the profitability of your company but also protects your employees from any major changes regarding management or shareholders. They can continue to attend work safely in the knowledge that their position is secure.

As you enter marriage, you want to consider ways to protect your business, and a prenuptial agreement is one viable option. If you are confused about your rights in Iowa, make sure you take a closer look at your legal options.