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Protecting Your Business with a Prenuptial Agreement in Florida


In Florida, when a couple divorces, all properties that were acquired during the marriage are a part of the marital estate. However, what many individuals do not know is that the accrued value of a business is also considered a part of the marital estate.

As an example, if you started a business that was valued at $100,000 at the time of your marriage and the business was valued at $500,000 at the end of your marriage, the $400,000 in accrued value would be considered a part of the marital estate without a prenuptial agreement in place. If you want to protect your business from equitable distribution, you would need a prenuptial agreement to do so.

Prenuptial agreements can protect your business 

Those who own or operate a business in the State of Florida should consider getting a prenuptial agreement to protect that business from our state’s equitable distribution rules. While some states divide all marital property 50/50, the state of Florida operates on a system of equitable distribution. This means that if one spouse is the primary breadwinner, they could end up losing more than 50% of their equity in a business. If you want to keep your business separate from the marital estate, you need a prenuptial agreement in place to do so.

A prenuptial agreement can stipulate what will happen to the business should you and your spouse divorce. In a divorce, your business is considered an asset that is subject to equitable distribution. This is true even if you began the business before the marriage took place. The value that the business accrued during the marriage is considered a part of the marital estate. So, you must have a prenuptial agreement in place if you want to protect your business.

What should my prenuptial agreement include? 

A prenuptial agreement is technically a contract between a couple concerning what would happen in the event of a divorce. The contract governs assets, debts, income, and expenses once a marriage dissolves. A prenuptial agreement allows you to separate certain property and retain control and possession of that property. Your prenuptial agreement should include:

  • A valuation of the business prior to the marriage – The value of your business should be established before the marriage takes place. This way, if the marriage does dissolve, the amount of accrued value will be established in writing. Also, if you don’t have a prenup in place, it would limit the other spouse’s compensation to the accrued value and not the entire business.
  • Establish fair compensation for the non-owner spouse – If your spouse plans to work at the business, you will want to establish fair compensation for them. By establishing a fair rate of pay, the wages are less likely to be attacked as part in divorce proceedings.
  • In-kind contributions – If your spouse stays at home for the purpose of child-rearing, they are contributing to the business indirectly by freeing up your time to focus on the business. You will want to recognize this in a prenuptial agreement.
  • Grant a percentage of the business to your spouse – You can stipulate in a prenup that your spouse is entitled to a certain percentage of your business. This would keep the business out of the marital estate and protect it from equitable distribution. This can be beneficial for protecting a family business that was brought into the marriage.

Talk to a Tampa, FL Family Lawyer Today 

The Tampa, FL family law attorneys at Westchase Law, P.A. represent the interests of couples who are looking to begin families together. We can help you draft actionable prenuptial agreements that protect your business from equitable distribution in the state of Florida. Call today to learn more.

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