Should you protect your new business from a possible future divorce settlement?

13 October, 2014
by: Cripps Pemberton Greenish

It has recently been reported that there has been a surge in pre-nuptial agreements fuelled partly by entrepreneurs wishing to protect their fledgling businesses and future profits from any possible divorce settlements down the line.

The new wave of pre-nups tends to suggest it is not just those who already have established businesses and wealth who are seeking to protect their fortunes, but business owners who expect to make money in the future.

Savvy businessmen and women are realising the importance of pre-nuptial agreements in the context of their business start-ups and no doubt want to ensure that their hard work in forging a successful enterprise does not go to waste in what could be acrimonious divorce proceedings years later. Just like any other contracts made at the start of a business venture, it seems that many entrepreneurs now see pre-nups as another important aspect of business planning.

The ruling in the Radmacher case, in which the husband of German heiress Katrin Radmacher attempted and failed to have their pre-nup set aside, has also without doubt added to the increase in these types of agreements. The judgement essentially made pre-nups more enforceable in law, meaning that they should now be a consideration not only for wealthy individuals but also for people starting out in the commercial world who want to avoid the potential business instability that divorce and financial remedy proceedings can often entail.