While no one plans on getting a divorce, creating a prenuptial agreement may protect a person’s business interests if a marriage fails. A prenuptial agreement might stipulate that a Tennessee company that was formed before a couple got married remains the sole property of its original owner. Without such an agreement, the company could become marital property once a couple was officially wed. One of the key benefits of negotiating a prenuptial agreement is that it allows a couple to determine how much a business is worth.
This is important because any appreciation in the company after a marriage becomes official could become marital property. Therefore, it is necessary to have a baseline to determine how much the organization has grown in value since the marriage started. It is also a good idea to have a plan in place in the event that a company loses value during a marriage.
A prenuptial agreement can determine the process used to decide how much the company is worth. In most cases, it is best to avoid the need for an outside party to perform an appraisal as it can create disruption for the company’s staff. Finally, such a pact may stipulate how much of the company that a spouse could be entitled to in the event of a divorce. In some cases, this may be less than 50% of the business.
If a prenuptial agreement is considered valid, its terms will typically dictate how assets are split. It may also determine if either party to the marriage is entitled to alimony. An attorney may review such a contract to determine if it is still valid. Legal counsel might also review any other agreements that were made after a couple got married but before the divorce occurred.