Did you know that research shows that young men and women today will likely have more spouses than children? Unfortunately, that could have a huge impact on your family business.
Most people do not like to discuss these issues due to the sensitivity of their nature, but these are issues that need to be considered. Two available options include a prenuptial agreement and/or a shareholder buy/sell agreement.
A prenuptial agreement seeks agreement on how the marital assets will be divided if the pending marriage ends in divorce. To make the agreement enforceable, the terms have to be fair, and each spouse is entitled to an attorney and to fair disclosure.
A shareholders’ buy/sell agreement gives the business or the other stockholders the option to buy back the family business stock if it would otherwise be transferred as part of a divorce decree.
Working with your Rea & Associates advisor, along with a good attorney, could mitigate some of the risks your business may face in the future.
Once you’ve protected your business with a prenuptial agreement and a buy-sell agreement, how do you make sure it goes to the people that you want it to (and not to Uncle Sam)? My colleague, Tim McDaniel, explains how to transition your business and why family owned businesses now face a window of opportunity to take advantage of tax savings while making the transition.
Contact Our Ohio Business Planning Specialists
Not sure if your prenuptial agreement or buy-sell agreement protect your business? Want to make sure that your documents have you covered? Contact Rea & Associates for assistance in determining what documents you need to protect your business. Our Ohio business planning and business valuation specialists will analyze your situation and determine how to protect your business.