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I have a prenup. How will that affect my divorce?

| May 25, 2021 | Family Law |

Many Georgia couples enter into prenuptial agreements when they decide to marry. This is not unusual. However, the terms of prenuptial agreements often differ based on the financial stability details for either partner. Some individuals have significant prior wealth they wish to protect from being included in marital property in the event of a divorce, while others have specific entities such as a business that they want to be kept separate from marital property. This is especially true when one spouse is in a partnership that will generate income during the term of a marriage. While a prenuptial can appear counter-productive in some cases, there are others where they make excellent sense.

Protecting a personal business

One of the primary reasons for a prenuptial is business ownership prior to getting married. The spouse who does not own any claim on the operation could be requested to forfeit any future ownership claim no matter how small that may be. The income generated from the business after becoming married will still be marital property, but the prior interest in the company will stay completely with the proprietor spouse. When one spouse is involved in a business partnership prior to the marriage, the prenuptial will typically consist of forfeiture of any family law ownership claim on the business. Problems can happen when a partner gets divorced without a prenuptial in place, sometimes even forcing the sale of the business or buyouts within the partnership.

Protecting previously-owned assets

Many people also have accumulated prior wealth that they want to protect. Even though income generated by owned investment capital is considered marital property per Georgia family law after a marriage becomes effective, the actual investment capital being used to generate the income can be retained as personal property through a prenuptial agreement. Standard of living provided by the investment funds will also be a component of any future divorce, so even a prenuptial will often not protect the whole of one spouse’s personal holdings.