Entrepreneurs should know that there are no guarantees that an endeavor will be successful in the future. Whether this endeavor is a business or a marriage, it is wise to protect yourself before making a commitment.
This is why it is crucial for young entrepreneurs to protect themselves with a prenuptial agreement before they get married. Unfortunately, divorce among entrepreneurs is not uncommon, and a prenup can address and protect three critical assets you may have.
Your ideas
Ideas, inventions and other creations of the mind are intellectual property. As a young entrepreneur, you may have considerable intellectual property, even if it has yet to be fully realized.
Establishing ownership of your intellectual property in a prenuptial agreement can allow you to retain control of it if you get divorced. It can also help you secure any financial profits you earn from it in the future.
Your business ownership
As an entrepreneur, you could have a stake in one or several business ventures before you get married. If your marriage ends someday, your role in these companies — and the companies themselves — could be in jeopardy.
For instance, you could wind up having to split any appreciation in the value of the business with the other person. And if you own a business with your soon-to-be spouse, you risk serious consequences if you do not address ownership and business division in the event of a divorce in a prenup.
Your property
Entrepreneurs often enter a marriage with separate assets and property. These properties (and profits from these properties) can become eligible for division in a divorce if you do not protect them in a prenup.
In terms of your business’ property, you could also put your those assets at risk if the other person carries debt and creditors come after you for payment. Finally, a divorce could wind up costing the company money and drain resources, which would adversely affect employees and business partners.
Young entrepreneurs may not be deterred by risk. However, minimizing it can make it easier to plan ahead and navigate difficult situations. Having a prenuptial agreement before you get married is a common way to reduce risk and complications in the event of an unexpected breakdown.