Prenups. It is fair to say that a certain stigma is attached to that word. After all, when planning a wedding, the last thing a couple wants to think about is the potential end of their marriage. The same is true for business partnerships: dissolution of a newly-minted business is the furthest thing from the mind of small business owners. However, in both cases, planning ahead—whether through a prenuptial agreement or through a dissolution plan in a partnership agreement—can have both legal and financial benefits in the long term.
Over the past few years prenuptial agreements have become more commonplace. There are various reasons for this rise in prenups. First and foremost is the sad reality that nearly half of all marriages in this country will eventually end in divorce. With the high divorce rate being well known, couples have found it increasingly advisable to enter into these agreements. Additionally, individuals are now getting married later on in life so when they do get married, they have accrued more wealth, more money in their retirement plans, and are more likely to own real estate. The more assets you have, the more beneficial a prenup can be.
Proper planning also applies for business partnerships. For businesses, dissolution agreements can help prevent misunderstandings, allow for a speedier and more efficient dissolution, provide defenses against lawsuits, and make it less likely that partners will end up suing each other. Dissolution agreements are typically recommended for business partnerships so that if a partnership dissolves, the partners do not have to default to their state’s partnership statute or common law for guidance.
Perhaps the greatest benefit of prenups and dissolution agreements is that they provide guidance for how to handle an emotional situation. The dissolution of a marriage or business is charged with emotions for those involved. Having a plan in place in the form of a prenup or dissolution agreement can reduce stress and anxiety for all parties.
The Gowen Group has experience in the realms of family law and setting up business partnerships. We would be happy to assist you with creating a prenuptial agreement, a postnuptial agreement (just like a prenup, except it is formed after the couple is married), or a partnership agreement that includes terms for dissolution. Contact us today.