Any business started during marriage could be allocated among the spouses. Any growth in a pre-existing business that took place during marriage could also go to a former spouse. A business may be divided even if one spouse is the named owner of the business or put in most of the work or money in continuing its operation.
Protecting a business needs to begin early. Some measures should take place before marriage.
A prenuptial agreement is one effective precaution. A prenup, also known as a matrimonial agreement in Louisiana, is a written contract between an engaged couple that sets forth what happens to their businesses or other property if they ever divorce.
Each person must enter a matrimonial agreement voluntarily and without coercion. The prenup must be reasonable and each party should have their own attorney to help negotiate and draft the agreement or it may be invalidated by a judge.
A postnuptial agreement can also provide some protection if a couple got married without executing a prenup. A post-nup must meet the same requirements as a prenup. While not as ironclad or enforceable as a prenuptial agreement, a post-nup reveals the couple's intentions and is better than doing nothing.
Transferring business ownership into a domestic or foreign asset protection trust or other trust is another precaution. However, trusts are legally complex and there are restrictions governing the types of corporations that trusts can own.
An attorney can represent spouses and help them draft a prenuptial or postnuptial agreement or form a trust. Attorneys may also protect a spouse's interests and assure that a divorce settlement or decree is fair and reasonable.