Rupert Murdoch, the 82-year-old media mogul worth over $11 billion, has filed for divorce from his third wife, Wendi Deng, in New York. Legal experts say that he has chosen the venue for his filing wisely, as New York courts are more likely to uphold a prenuptial agreement than those in his native Australia or the U.K.
If you are married and own a business, you need to know how that business could be affected in case of a divorce and how to protect business assets from a split. Entrepreneur.com recently outlined the steps to take if you are:
Getting married and own a business – whether or not you live in one of the nine community property states, a prenuptial agreement is a must for business owners who are getting ready to walk down the aisle. Experts advise getting a prenup at least six months prior to the wedding date to nullify any potential claims of duress.
If you live in an equitable distribution state, the prenup should outline the division of business assets based on how involved each spouse is in the business. In community property states, a prenup should detail who gets what in the event of a divorce otherwise, it’s half and half, no matter what involvement each spouse has.
The key with a prenuptial agreement is that in order for it to work, both spouses MUST have independent legal counsel. This means a self-drafted prenuptial agreement simply will not work. Contact us if you are thinking about marriage.
Already married and starting a business – get a post-nuptial agreement, which acts the same as a prenuptial agreement but is executed after the marriage.
Married without a prenuptial agreement – consider getting a post-nuptial agreement, even though it means you will need to disclose all your business financial information, including details you may not have already shared with your spouse.
Finally, you may want to consider Trust planning to protect your business assets. By planning with a Trust you may not need a prenuptial or post-nuptial agreement at all. Using trusts for marital asset protection planning is advanced planning, so be sure to use a lawyer who truly understands all the ramifications.
If you’re a small or mid-size business owner, call us today to schedule your comprehensive LIFT™ (legal, insurance, financial and tax) Foundation Audit.