No one plans a wedding expecting a divorce. However, if a marriage fails, a business owner stands to lose more than a spouse.

Seeking a prenuptial agreement can help keep your business protected, letting it continue to flourish even when your marriage is not.

1. Establishing an initial value

As businesses grow, they become more valuable assets. A spouse who has an active part in a company’s development may have rights to a portion that increases as the marriage progresses. It can be difficult to determine exactly how much change has occurred over the years without something to look back on.

A prenuptial agreement helps you to establish the current value of a company and what state it is in upon the date of marriage. You can also list your business as separate property, keeping it apart from any divorce settlements.

2. Determining present values and percentages

The agreement is a perfect time to set conditions on how to value the business if divorce proceedings occur. By determining this beforehand, you save the time and effort required to analyze your business. Since audits and cost evaluations will put a strain on your employees, pre-planning allows work to proceed as usual while you handle personal matters.

You and your partner can also agree on a set percentage. The portion of your business lost will be fixed, while different guidelines serve as the basis to divide other marital assets.

3. Setting expectations

Your partner may play an important role in the growth of the business. Tracking how an individual has helped to increase profits over a period of years can be a tangled knot to unravel. Even working in the background, a spouse may still have some claim to a company’s success.

Using the prenuptial agreement, you can establish exactly how both you and your spouse interact with the business. This offers a framework that shows how both partners influenced the business and what assets they have helped to increase.