You may have started your company long before meeting your future spouse. After years of building it, you might assume its future growth belongs entirely to you. A Florida divorce lawyer can explain why that assumption could leave you facing an unexpected claim.
Marriage can change how Florida law treats increases in your company’s value. A carefully written prenup can help you decide how that growth will be handled before a disagreement arises.
Is a business I owned before marriage still mine?
Your ownership interest in a company you acquired before marriage generally begins as nonmarital property. That means your premarital interest ordinarily stays with you in a divorce.
However, an increase in its value during marriage may be marital property. Florida law includes growth caused by either spouse’s efforts or by marital funds invested in the business. Keeping the company solely in your name doesn’t automatically protect that increase.
Why can my own work create marital value?
You might think your spouse can claim business growth only if they helped run the company. But your own work during marriage can create value that’s subject to division.
Suppose you owned a landscaping company before the wedding. During marriage, you win larger contracts and expand its operations. The increase in value caused by those efforts may be marital even if your spouse never worked there.
Growth caused only by market conditions may remain nonmarital. Separating that growth from increases tied to work or marital money can require help from a business valuation professional.
Does marital growth mean my spouse gets half the company?
Florida’s property division process generally starts with equal division of marital assets and debts. That starting point applies to the marital portion of your business interest, rather than automatically to everything you owned before marriage.
A claim to marital business value also doesn’t necessarily make your spouse a business partner. Depending on the available assets, a settlement or court award may allow you to keep the business while your spouse receives other property or a payment.
Can a prenup protect future business growth?
A valid prenup can establish how your business interest will be treated if you divorce. It can address future growth caused by your work as well as increases caused by market conditions.
Don’t assume a sentence saying “the business stays mine” covers every possible dispute. The agreement should clearly address increases in value and explain which rights each spouse is giving up.
If your future spouse plans to work in the company, discuss how that work will be paid. The agreement can also address contributions from household savings and how those contributions affect each spouse’s rights.
A Florida divorce lawyer can help tailor those terms to your company. You can also discuss how to handle income paid to you and profits kept in the business, so ownership and earnings aren’t left open to interpretation.
What should I do before signing a prenup?
Start the process well before the wedding so both people have time to review the agreement. Each person should have their own lawyer to explain its effect and discuss changes.
Provide clear financial information about your ownership interest and business debts. Financial statements and tax returns can support that disclosure. A valuation before marriage can also help document the business’s starting value.
Keep those records after the wedding too. A signed agreement is easier to apply when you can trace business spending and show how the company changed over time.
Florida requires a prenup to be in writing and signed by both parties. It becomes effective when you marry. An agreement signed involuntarily or obtained through fraud can be unenforceable, so the signing process deserves careful attention.
How can Ranson & Ranson help protect my business?
Planning ahead gives you a chance to address business growth while you and your future spouse can discuss expectations together. Clear terms can help reduce uncertainty about your company’s future and the financial rights of both spouses.
If you’re preparing to marry and own a business, speak with a Florida divorce lawyer at Ranson & Ranson. Contact us online or by calling on (954) 915-1445 to discuss a prenup that addresses your business ownership and future growth.
