Imagine you own a successful business. Imagine that you remarry after your spouse of many years passes away. Imagine you continue to be successful in your business after you remarried but you are unsuccessful in that marriage and want to get divorced. Now imagine that the value of your company rose significantly during what is only a short second and unhappy marriage.
The difference between what your company was worth at the time of the marriage and what it is worth at the time of the divorce is a “marital asset” and subject to equitable distribution. That means that, without an experienced family law attorney who can advise you of the nuances of divorce law, you could wind up having to pay your former spouse hundreds of thousands of dollars or even millions of dollars for his or her one-half interest in the increased value of your company. In other words, you could have to pay your former spouse loads of money just to keep the business you owned long before you even met that spouse. You can be strapped for cash and reduced to borrowing money or selling other assets to buy out your spouse or you can wind up having to give your spouse collateral to secure a payout over time. You certainly don’t want that former spouse to own a part of your company. All of that will severely affect your lifestyle and the future ability of your company to borrow funds or expand.
This buyout of your former spouse’s interest in your company has nothing to do with the potential that you may have to pay alimony, which could mean additional outlays of money.
Now imagine you had a valid and enforceable prenuptial (premarital) agreement in place, that is, an agreement before the wedding that clearly spelled out that your company remains yours even if the value of the company increases during the marriage. Think about the money that you would keep. Think about the litigation you would avoid. Think about the speed with which you could conclude your divorce compared to extensive attorney’s fees and business valuation costs to determine the appreciation of your company during the marriage.
You need not just an experienced family law attorney Boca Raton, but one who is skilled in the drafting of premarital agreements. The admonition not to be “penny wise and pound foolish” could not be more apt.