Protecting Your Family Business With A Prenuptial Agreement In San Jose

When planning a wedding, discussing a prenuptial agreement might not be the most romantic topic. However, if you own a family business in San Jose, it’s a conversation you can’t afford to skip.

In California, where community property laws can put your business at risk during divorce, a strong prenuptial agreement can provide critical protection. Our San Jose prenuptial agreement lawyer explains how it can safeguard your hard work while building trust and setting clear expectations for family business owners.

hy San Jose Family Business Owners Need A Prenuptial Agreement

California is a community property state. Without a prenuptial agreement, most assets acquired during marriage, including a family business, can be considered shared property.

Under California Family Code Section 760, anything earned or gained during the marriage belongs equally to both spouses unless a legally binding agreement says otherwise. If you own all or part of a family business and do not have a valid prenup, a divorce could trigger:

• Forced sale or division of the business;
• Court-ordered buyouts of a spouse’s interest;
• Business debts being treated as shared marital debts;
• Exposure of confidential business records in court proceedings;
• Involvement of a court-appointed expert to value the business.

A properly drafted prenuptial agreement can shield your company from risk by clearly stating that the business remains your separate property. It can also address how any income drawn from the business gets treated during the marriage.

Key Terms to Include When Protecting Your Family Business With A San Jose Prenup

Be specific when drafting a prenuptial agreement in San Jose to protect a family business. Being vague about assets or not including specific terms for their division could cause problems when enforcing it through the Santa Clara County Family Court.

Not being transparent about business assets or debts could result in a San Jose prenuptial agreement being declared invalid. To prevent this and protect your rights, important terms to address include:

• Ownership rights: Confirm the business remains separate property.
• Value appreciation: Specify whether increases in value during marriage are protected.
• Management and control: Define who has the authority to make decisions about the business.
• Income distribution: Clarify whether business income gets treated as separate or community property.
• Debt responsibility: Specify who is responsible for business-related debts.
• Buyout provisions: Outline how a spouse would get compensated, if necessary.

Remember, a prenuptial agreement must be signed voluntarily by both parties and should not unfairly benefit one spouse over the other. Getting professional legal guidance helps ensure the prenup conforms to state laws and is enforceable.

Discuss Your Options With Our Experienced San Jose Prenuptial Agreement Lawyer

If you own a family business, preserving this asset and ensuring its future success starts before you walk down the aisle. At Argyris Mah, LLP, we have extensive experience crafting prenuptial agreements that protect the rights of business owners, stand up in court, and provide peace of mind. To discuss your options, give us a call or contact our office online. Schedule a confidential consultation today with our San Jose prenuptial agreement lawyer.

Sources:

leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=FAM&sectionNum=760.

santaclara.courts.ca.gov/divisions/family-division