Many Washington marriages include a spouse who was already a business owner when the marriage took place. Marriages that end in divorce often face complications regarding business assets and/or voting control if/when assets are transferred to a non-business owner through divorce. Some say prenuptial agreements help prevent such complications and should be considered by any business owner who wishes to avoid the dilution of voting power.
There have been many instances where a divorcing spouse has challenged ownership of company shares. By entering a valid prenuptial agreement, it is often possible to clearly define asset ownership to protect separately owned business interests in the event a divorce takes place. Such clarification may also help limit the business-owning spouse’s liability toward the other spouse’s debt should the marriage end.
In many situations, however, merely listing a business or asset in one spouse’s name does not necessarily mean it is considered separate property. It is crucial that those with questions regarding certain assets seek clarification before addressing the issue in court. Laws and guidelines governing such matters vary by state.
It may happen that a divorcing spouse in Washington challenges a prenuptial agreement. Under such circumstances, the court will typically investigate to determine whether the contract was validly enacted and whether both signed parties clearly understood the impending agreement at the time. In addition, other aspects of an agreement may be considered, such as whether each intended spouse retained private legal counsel and whether there was full disclosure of liabilities and assets. Anyone with questions regarding issues related to business assets in divorce may seek answers by contacting a family law attorney in the area.
Source: bizjournals.com, “Just say ‘I do’ to prenuptials“, Nancy Kennedy, July 8, 2016
