A pre-nup may protect your business assets

Jessica Pitt, associate and family law specialist, advises business owners to consider making a pre-nuptial agreement to protect their business assets for the future.

Business owners are used to protecting their business from commercial risks but too few protect their business from a potential risk which is much closer to home and which, potentially, has far worse consequences for the future trading of the business: a claim from an ex-spouse. 

A pre-nuptial agreement is a document signed by a couple who are due to marry to dictate what they would like to happen to their money and assets if the marriage should break down. 

In October 2010 the law regulating pre-nuptial agreements drastically changed. Before then there was no guarantee that agreements would be upheld by the Courts. Now, pre-nups will be upheld in the vast majority of cases. 

For the first time, people have security in knowing that if they chose to have a pre-nuptial agreement, they will be able to enforce it should the need arise. This means more business owners could and should be taking steps to protect and preserve their business assets against the risk of sale or carving the business up as part of a divorce. 

Who should have a pre-nuptial agreement? 

The people who are most in need of protection are those who have money, land or business interests that they want to protect. This often relates to people who are marrying later in life, or for the second time.

Pre-nups are also ideal for people who are likely to inherit money or shares in a family business during the marriage. Having an agreement in place provides security for the whole family knowing that any legacies will be protected.

If this is you, what should you do next? 

If you think that a pre-nuptial agreement would help, you first need to talk to your partner about it. Pre-nups are not compulsory so you will both need to agree that you want to have a legally binding agreement. This can be a difficult subject to broach, although many couples do have these conversations when they are talking about marriage. The bottom line is that the agreements provide security for you both; the benefit of preventing the risk of a much greater conflict in the future is something that everyone would hope for. Deciding what the terms of the agreement should be is often the most difficult part, the starting point is agreeing to have one in the first place.

If you both decide that an agreement would offer you better security for your futures, then you will both need to consult a lawyer. The lawyers can help discuss and negotiate what the agreement should say to make sure you are both being treated fairly. 

Given the importance of preserving business assets, it seems likely that the use of pre-nuptial agreements will continue to increase as more people recognise the valuable security that they can provide. 

Jessica can be contacted on 01392 685244 or email This e-mail address is being protected from spambots. You need JavaScript enabled to view it for further information or advice on making a pre-nuptial agreement.