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Forbes
6 days ago
- Business
- Forbes
How To Protect Business Interests With A Prenuptial Agreement
Julia Rodgers, CEO of HelloPrenup, champions collaborative prenups and promotes financial communication in marriage. When starting or investing in a business, there is no shortage of advice on how to protect yourself: form an entity that shields your personal assets, purchase general and professional liability insurance, be prudent in not mixing personal and business finances. Yet many business professionals don't realize how much risk they take on by not having a prenuptial agreement. How can a prenup protect your business interests? Continue reading to uncover the answers to your questions and to learn more about protecting the future of your business investments. Why Protect My Business In Marriage? In a divorce, courts divide marital assets and debts between you and your partner. Whether that means awarding your ex-spouse half the fair market value or a share of the sale proceeds, your business interests will likely be divided in a divorce. Regardless of when you started your business—before or during marriage—your spouse will likely have a right to participate in the business's appreciation during the years you were married. A court will see this increase in value as partly attributable to your marriage and to your spouse. Say you left for work every day for a decade while your partner sacrificed a potential career to stay home and take care of the kids. Or your spouse contributed behind the scenes as your sounding board or brainstorming partner. There are countless ways a court sees a marriage as contributing financially or otherwise to a person's career and business success, and they're prone to award the non-business spouse a share in the profits upon divorce. How Can A Prenup Protect My Business Interests? A prenuptial agreement allows you to categorize your assets as separate property or marital property. You and your future spouse get to predetermine how your assets and debts will be distributed in the event of a divorce. Imagine the headaches, confusion and legal expenses you can avoid by having these conversations now as opposed to during a divorce when you're less likely to negotiate harmoniously. In your prenup, classifying your present and future business interests as separate property can protect them from being divided in a divorce. You can also categorize intellectual property as separate property and include a confidentiality clause to prevent your partner from sharing or using your trade secrets and privileged information against you or in competition with your business. If you're in a situation where you and your spouse started a business together, a prenup will allow you both to clarify the responsibilities and protocol should a divorce happen in the future and help ensure your company continues to run smoothly throughout the process. How Do Courts Divide Property Without A Prenup? States apply one of two distinct approaches when dividing marital property in a divorce: community property and equitable distribution. Community Property: In the United States, only nine states apply community property law. These states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. In these states, everything acquired during marriage is assumed to be community property and is generally divided equally regardless of who earned the property. Property acquired before marriage or during the marriage as inheritance, gift or personal injury settlement is classified as separate property and is usually safe from distribution. Equitable Distribution: Alternatively, states that follow equitable distribution attempt to divide assets and debts fairly (and not always 50/50) based on the circumstances. These states take a deeper look into the facts of the marriage, such as who earned the assets, who incurred the debt and the length of the marriage. What Other Topics Should I Consider When Protecting My Business Interests? There are many areas in which your business interests could suffer if not adequately protected beforehand. Here are some additional areas where your business might be vulnerable: If you're hoping to sell your company, buyers want to see a clear chain of title. If ownership shares in your company are split with your ex-spouse, this could muddy the waters and make the purchase of your business less appealing. Moreover, if you're tied up in a divorce litigation, aspects of your company might be affected; this could make your entity, along with its financial stability and valuation, appear risky. It is critical for any business that its shareholders and members have the ability to vote and manage the entity free from outside influence. If your shares and voting rights are split with your ex-spouse during a divorce, your ex-spouse might become an unwanted partner with influence over the trajectory of the business. If you're stuck in a situation where your ex-spouse is about to receive voting rights in your company, you could offer to buy them out. Of course, this could significantly alter the cash flow of your business or deplete your personal finances. Depending on your partner's willingness to find a solution, there are ways around sacrificing control of your business; they just might be pricey. Your company's governing documents (i.e., bylaws, operating and partnership agreements) should address the issues discussed above. For example, your operating agreement can limit a future ex-spouse to a financial payout with no voting or control rights. The language in your governing documents should align with the terms of your prenuptial agreement. Conclusion Entering a lifetime commitment through marriage is similar to entering a business partnership minus the romantic aspect, of course. You are merging your life with someone else's. You wouldn't invest in a business without having an agreement in place to outline the expectations of the parties involved. It stands to reason that you and your future life partner could similarly benefit from an agreement clarifying financial expectations and how you might divide assets and debts in the future. The information provided here is not legal advice and does not purport to be a substitute for advice of counsel on any specific matter. For legal advice, you should consult with an attorney concerning your specific situation. Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
Mint
25-06-2025
- Business
- Mint
Inside the complex and petty prenups of the superwealthy
When Jeff Bezos and MacKenzie Scott divorced in 2019, they didn't have a prenuptial agreement to govern the division of their assets. She received a stake in valued at more than $35 billion. Now, as the world's third-richest man prepares to marry Lauren Sánchez in a multiday Venetian extravaganza, onlookers can't help but wonder whether there is a prenup and what it looks like. It couldn't be learned whether they have one. A spokesman for Bezos declined to comment. But divorce attorneys say Bezos, now worth over $200 billion, would be mad not to have one. The reason is simple: It is one of the most important tools the ultrawealthy use to protect their fortunes. Attorneys say prenups are only becoming more common for people of all wealth levels. For those with net worths that are nine figures or larger, these agreements become sophisticated legal instruments to protect assets, business empires and family dynasties. Prenups can dictate who gets access to the private jet, how the thoroughbred horses are cared for and who gets to say what about the divorce on social media. The embedded confidentiality agreement can even prohibit disclosing the existence of the prenup itself, says Doug Julian, co-founder of HelloPrenup, a prenup website. Ultrawealthy prenups must address assets that can't be easily split or sold, such as startup equity that can't be traded in the public markets; carried interest in private-equity funds; royalty streams from intellectual property; and family trusts with complex distribution rules. Without proper planning in a prenup, the illiquidity of these assets can lead to painful trade-offs. Selling company shares to fund a settlement can trigger significant capital-gains taxes. Dividing voting shares might shift control of a company. Transferring assets between spouses can create unexpected tax bills. Lauren Sánchez and Jeff Bezos arriving at the Vanity Fair Oscars party in March. For the ultrawealthy, negotiating a prenup often focuses on preserving lifestyle and acknowledging the relationship's importance, while keeping business interests and major assets off the table in a divorce. 'You don't want them to have access to anything that would significantly change their wealth," says Robert Cohen, a New York attorney whose firm handles dozens of prenups annually for clients worth over $100 million. Cohen, like other attorneys interviewed for this article, didn't work with Bezos or Sánchez. Ultrawealthy individuals often have several homes in different states and countries. That means they have legal exposure in different places. A divorce could be filed anywhere. The stakes are high: A prenup that is enforceable in New York might be tossed in London. That is why top-tier prenups often include choice-of-law clauses, locking in which jurisdiction's rules apply regardless of where a divorce unfolds. 'We have the agreements vetted by lawyers in those jurisdictions to make sure there's not going to be a problem," says Cohen. 'I recently worked on a case where we had to consult lawyers in eight different jurisdictions—all over the world." Prenups can lay out who in a divorce supervises the packing of personal belongings, or can require a spouse to move out within 30 days. Some clients demand that their prenups stipulate that a spouse maintain a specific weight—say, within 20 pounds of what it was on the wedding day—or exercise four times a week during the marriage. Others want financial penalties for cheating: One attorney described a client seeking a $1 million payment for each affair. Randall Kessler, an Atlanta-based divorce attorney, recounts a professional basketball player client who insisted his prenup acknowledge that 'NBA players are known to have affairs" so cheating couldn't trigger costly penalties. Judges may view behavioral clauses like weight requirements as overly invasive or punitive. They can also create endless disputes. Courts also typically won't honor prenuptial terms that dictate child custody or support. Still, these agreements often reflect an anxiety about losing control. 'Every prenuptial agreement is a power play," says Nancy Chemtob, a New York divorce attorney. 'It's exciting for them to have this control." The leverage often goes to whoever cares less about the marriage. 'If you're willing to walk away, you hold all the cards," Kessler says. Divorce lawyers say they detect inklings of deeper insecurities in this maneuvering. 'Very wealthy people are typically accustomed to being in total control of every aspect of their life," says Jodi Furr Colton, a Florida attorney. 'They often don't deal well with discomfort and uncertainty." Most ultrawealthy clients aren't trying to leave their spouses with nothing. 'I find that they're often willing to provide enough in the prenup so it won't be a big negotiation," says Cohen. Prenups can include 'sunset clauses" under which the agreement expires after 10 or 20 years—a way to acknowledge that long marriages grow into genuine partnerships. These days, ultrawealthy clients increasingly prefer stepped agreements, under which a spouse might receive $5 million if there is a divorce after five years of marriage and $20 million after 10, attorneys say. One thing these agreements can reliably deliver is silence. While courts might toss sweeping confidentiality demands, narrowly written nondisparagement clauses typically hold up. High-profile couples often use them to bar ex-spouses from sharing intimate details, financial records, or embarrassing stories with the media. 'Wealthy people are insecure, just like you and me," says Peter Walzer, a California family-law attorney. 'They want to be loved. The wealth becomes an impediment because they're afraid of being taken advantage of." Write to Dalvin Brown at
Yahoo
11-03-2025
- Business
- Yahoo
Inc. Names Julia Rodgers to Its 2025 Female Founders 500 List
Inc.'s eighth annual Female Founders list highlights the nation's top business leaders who challenge the status quo to tackle some of the world's biggest problems New York, New York--(Newsfile Corp. - March 11, 2025) - Inc., the leading media brand and playbook for the entrepreneurs and business leaders shaping our future, today announced its eighth annual Female Founders list, honoring a bold group of 500 women whose innovations and ideas are leading their industries forward. These resilient entrepreneurs expressed grit and drive to collectively attract approximately $9 billion in 2024 revenue and $10.6 billion in funding. Each year, Inc. editors review thousands of applications highlighting female founders who are challenging the status quo and tackling some of the world's biggest problems, and cull applicants through three rounds of judging, looking specifically at an entrepreneur's bona fides in the past year. Criteria include quantifiable metrics such as revenue, sales, revenue growth, funding, and audience size. Inc. also looks for qualitative metrics including social media momentum and stories of impact. Honoree selection is also honed through the evaluation of the program's advisory board: Cate Luzio, founder and CEO of Luminary; Dany Garcia, founder, CEO, and chairperson of the Garcia Companies; Pinky Cole Hayes, founder and CEO of Slutty Vegan; Anu Duggal, founding partner at Female Founders Fund; Katherine Power, serial entrepreneur and partner at Greycroft; Tiffany Dufu, president of the Tory Burch Foundation and founder of the Cru; and Kay Koplovitz, co-founder and chair at Springboard Enterprises, founder of USA Network. "I am truly honored to be included in the 2025 Female Founders 500 list alongside so many inspiring women," said Rodgers. "This recognition is not just a reflection of my work but the dedication of each incredible team member at HelloPrenup. Our mission to empower couples with the tools they need to build a secure future is just beginning, and I'm excited for what's to come." The founders cross all industries and bring with them unique stories of success from each stage of the entrepreneurial journey - from startup to going public, being acquired by big buyers, or spending decades at the helm of an organization. Julia Rodgers, a former family law attorney, founded HelloPrenup with a vision to democratize access to prenuptial agreements and provide couples with a streamlined and affordable way to protect their assets and navigate their financial futures. Under her leadership, HelloPrenup has grown rapidly, expanding to a nationwide audience and partnering with major industry players, including Proof, Ellevest and celebrity attorneys Laura A. Wasser and James Sexton, and more. In addition to her work at HelloPrenup, Rodgers is a thought leader in the legal tech space and an advocate for women's financial independence. She regularly writes for Forbes, Boston Business Journal, and other prominent outlets, and she regularly guest lectures at Suffolk Law School. "Female founders know what struggle is, but they're also experts of improvisation, adaptability, and creativity. The women featured on this year's list exemplify these qualities. Through times of uncertainty, their unwavering dedication and steadfast leadership are not only inspiring but vital to driving progress," said Inc. executive editor Diana Ransom. To see the complete list of honorees, please visit: About Inc. Inc. is the leading media brand and playbook for the entrepreneurs and business leaders shaping our future. Through its journalism, Inc. aims to inform, educate, and elevate the profile of its community: the risk-takers, the innovators, and the ultra-driven go-getters who are creating the future of business. Inc. is published by Mansueto Ventures LLC, along with fellow leading business publication Fast Company. For more information, visit About HelloPrenup HelloPrenup is an innovative online platform that simplifies the process of creating prenuptial and postnuptial agreements for couples. By leveraging technology, HelloPrenup makes relationship contracts affordable, accessible, and simple to navigate, empowering couples to protect their assets and clarify financial rights for a more secure future. Founded by Julia Rodgers, the platform has gained recognition for transforming the landscape of relationship contracts and advocating for women's financial independence. Contact:Lauren Lavender, CMO Hello@ To view the source version of this press release, please visit
