Getting married could result in your Rhode Island business becoming a marital asset. This means that your spouse could obtain a partial or majority ownership stake in your company if the marriage were to fail. The good news is that there are steps you can take today to clarify what will happen to your company in the event of a divorce.
Why you need to create a divorce plan right away
While nobody likes to think about an important relationship coming to an end, failing to create a divorce plan could throw your company into chaos if your marriage fails. For instance, your spouse might be awarded a significant amount of company stock that he or she then immediately liquidates.
In such a scenario, the value of the remaining outstanding shares could fall quickly. Alternatively, your spouse could become a partner within the organization, which may have an impact on both your personal and professional lives. If you don’t want that to happen, it is important to create a plan before a divorce occurs that eliminates this possibility.
Create a prenuptial or postnuptial agreement
A prenuptial or postnuptial agreement allows you and your spouse to come to terms on key issues such as how much the company is worth or if it is to be considered marital property. It can also allow you to figure out if your spouse will be entitled to a portion of the company’s appreciation in value during the course of the marriage. A prenuptial or postnuptial agreement can clarify your spouse’s role in the business and how that may impact the structure of a future divorce settlement.
If you own a company or have other significant assets, it may be a good idea to include them in a prenuptial or postnuptial agreement. A family law attorney may help you craft these documents or take other steps to ensure that your property is sufficiently protected in the event of a divorce.