How to prevent losing your business if the romance fades
In the adage that love is blind, ensuring a pre-nup isn’t overlooked is crucial for many business owners who are contemplating tying the knot.
Building up a successful company invariably demands blood, sweat and tears – so why risk losing it all if the marriage falls apart?
While it might not be a romantic notion, bosses would be wise to consider – in the cold light of day – the fallout of failing to consider a pre-nup.
Wealthy romantics like Paul McCartney, may have spurned the prenup but the courts are taking them seriously. Increasingly such an agreement is regarded as the best option for business owners about to embark on marriage or individuals seeking to protect their assets.
For couples blissfully in love, the concept of their relationship ending in divorce may seem remote. The harsh reality is that thousands do and pre-nups are no longer just the preserve of mega-stars seeking to protect their ever-increasing fortunes.
Pre-nups enable company bosses and individuals to ring-fence part of their wealth at the outset of marriage. For couples who have built a business together, they could be the agreement that prevents a marriage breakdown from derailing the business.
While pre-nups were previously never considered truly enforceable in England – unlike in neighbouring Scotland – this all changed with the Radmacher judgment in 2010. This asserts that, if a pre-nup is entered into by both parties who are fully informed of all the relevant information – then the courts are likely to uphold it.
A pre-nup can help protect and preserve interests by managing expectations and equipping couples with solutions long before problems arise – a factor that can be key to avoiding substantial litigation costs at a later date.
Agreeing to the distribution and management of assets in a rational and level-headed manner enables a divorce (if such an outcome occurs) to proceed with minimal disruption, avoiding the conflict and emotional trauma so detrimental to all parties and the stability of the business.