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Prenuptial Agreements for Pennsylvania Business Owners



For many couples intending to be married, considering contingencies that would apply if the marriage failed can be difficult. However, entrepreneurs and business owners should always consider what will happen to their company or ownership stake in the event of a divorce. In many cases, a dissolution of marriage can jeopardize your stake in the company or work against you as a bargaining chip in marital settlement agreement negotiations. Therefore, considering, drafting, and executing a premarital agreement is often a prudent and necessary step for business owners in Pennsylvania.

Why Should Business Owners Feel Comfortable with Premarital Agreements?

Reduced to its most basic sense, a prenuptial agreement is essentially a contract between two parties. Most business owners and entrepreneurs are extremely familiar with contracts because these documents are how business gets done. Essentially, when people or entities negotiate and execute a contract they are making a promise. Typically one party will promise to provide a good or service while the other party typically agrees to provide compensation. Of course, contracts can cover an array of topics or subject matters. But, at their core, a contract entitles each party to certain treatment, compensation, certainty, or other “benefits of the bargain.”

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Why Are Prenups Essential for Entrepreneurs?

A prenuptial agreement is often an essential consideration when one or both spouses hold significant stakes in businesses or intends to form a new commercial venture after marriage. The reason a prenup may be essential is because, should the marriage fail, all marital property will be subject to equitable distribution between the spouses. Equitable distribution means that property will be divided “fairly.” However, what is “fair” is highly subjective and open to the interpretation of the court.

Thus, it is essential to protect all business or commercial interests that may be impacted by a divorce. As previously stated, all property or assets acquired during the marriage are typically considered marital property and subject to equitable distribution. Furthermore, even property and interests held before the marriage can be subject to equitable distribution to the extent that there was an increase in value during the marriage. It is therefore necessary to protect yourself and your company from the uncertainty that can be introduced when a couple divorces.

How Can A Prenup Protect an Entrepreneur in Pennsylvania?

In the case of a prenuptial or premarital agreement, the contract is between two individuals who intend to get married. In fact, when a couple actually does get married, the marriage itself is a type of contract between the spouses. Since a prenup is a specific type of contract the spouses can negotiate to include a broad array of provisions either spouse believes is necessary to protect his or her assets or interests in the marriage. Potential uses intending spouses may have for a prenup include:

  • Protection from the already existing debts or liabilities of the other spouse.
  • Protect a closely held or family business.
  • Define how property will be distributed in the event of a divorce.
  • Agreements regarding new business ventures formed during the marriage

Aside from protecting property interests, the future spouses can also use the agreement as a means to minimize the risk for marital disagreement. As is so often the case for career-focused individuals, pursuit of your business goals can sometimes leave the other spouse feeling neglected. The prenup can also be used to set for expectations and responsibilities for the marriage at the outset. Defined responsibilities can include:

  • Amounts each spouse should contribute to joint savings.
  • Whether spouses will establish and maintain a joint bank account.
  • What a spouse is entitled to if he or she supports the other spouse who is attending college,  trade, or professional school.
  • Agreements regarding timing and other aspects of certain major purchases such as a home.
  • How the couple should settle future disagreements.

These defined responsibilities should be tailored to meet the needs of the couple, their preferences, and their business activities. For instance, provisions regarding settlement of future disagreements may require the spouses to seek marriage counseling or hire an independent auditor or mediator.

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Work with a Knowledgeable Family Law Attorney in Philadelphia

The law firm of Sadek & Cooper is proud to serve family and business owners in Pennsylvania. Our family law attorneys can assist business owners who are getting married with practical concerns regarding your business. To schedule a confidential legal consultation, please call our law firm at 215-814-0395 or online today.


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