Most couples getting married in New Jersey hope these unions last a lifetime, even though about 50% of marriages still end in divorce. Divorcing couples have many factors to consider, including potentially splitting businesses. However, there are a few ways to protect your company’s future.
Prenuptial or postnuptial agreement
A prenuptial agreement is a legally binding document. This document lets couples choose what is marital property and what isn’t. The one drawback of a prenuptial agreement is that couples must complete it before marrying. Fortunately, postnuptial agreements also exist. Postnuptial agreements differ because two people can create these contracts after getting married.
A buy-and-sell agreement
If a prenuptial or postnuptial agreement isn’t happening, there’s still hope for protecting your company. Married couples can also complete a buy-and-sell, or buy-sell, agreement. This agreement isn’t always foolproof. But having this document in place can give you more control over what happens in the future of your business.
Establishing a trust
Business owners also protect their ventures by opening trusts. While they’re available in many forms, trusts typically establish ownership of assets. Moving your business into a domestic asset trust can protect it from division in a divorce. That’s because the trust would technically own the company. It’s vital to understand New Jersey’s specific laws about using a trust to protect your business. Making mistakes here could hurt your chances of keeping an ex-spouse out of your company.
Since New Jersey is an equitable division state, courts try to divide assets and debts between divorcing couples equally. That’s why taking the necessary steps to protect your business is critical. If not, your ex-spouse or someone they appoint could become an unwanted business partner.