Prenuptial agreements are an important tool for individuals who are entering into a marriage and have assets they want to protect should the marriage end in divorce. With many people entering into marriages later in life, they are oftentimes joining lives when one party, or both, have accumulated assets such as a home, retirement accounts or savings/investments. One asset that is important to protect with a prenuptial agreement is a business or family-owned business.
Family business owners, and their children who may come to own or participate in a family-owned business, should enter into a prenuptial agreement when contemplating marriage. Once an individual is married, any newly acquired assets, or appreciation of assets, may be considered marital property. For example, the appreciation in the value of a business may be considered a marital asset if the appreciation occurs during the marriage, and absent a prenuptial agreement. This scenario applies even when the business interest was an asset owned prior to marriage, and even if the spouse is not involved in the business and makes not direct contribution to increase the value of the business.
Prenuptial agreements are enforceable in Minnesota when both parties have fully disclosed their earnings and property, and each party has had an opportunity to consult with legal counsel of their own choice. The agreement must also be valid in how it is written and executed, signed voluntarily and fair at the time it is signed. Absent a prenuptial agreement, no verbal agreement or understandings are enforceable at the time of a divorce.
The timing of a prenuptial agreement is also important. It cannot be done too early before the marriage takes place, or too close to the date of the marriage. It is important to consult with an attorney as early as possible in order to allow time to discuss terms of the agreement, and to ensure that the timing of the prenuptial is done correctly.
After you are married, it may still be possible to protect individual assets through a postnuptial agreement. Schromen Law, LLC provides free initial consultations to discuss questions and goals regarding prenuptial or postnuptial agreements.
The material contained herein is for informational purposes only, and is not intended to create or constitute an attorney-client relationship between Schromen Law, LLC and the reader. The information contained herein is not offered as legal advice and should not be construed as legal advice.