Why Marriage May Be the Most Important Business Decision You Make

Marriage is, of course, a huge decision that has long-term impacts for your relationship with your spouse, and for your family. But as a family law attorney, I'm often surprised by how many people don't realize that marriage is also a business decision unlike any other. In fact, it may be your most important business decision.

Through my practice, I have found that couples who do recognize this aspect of marriage tend to have healthier relationships and, if it comes to it, less painful divorces. While conceiving of a marriage as (among many other things) a business may not come naturally to most people, it's a philosophy that a couple can adopt — and benefit from — at any point in their relationship.

A company without an operating agreement

Marriage changes everything, including your status with state and federal governments. Once you get married, there are a wide range of statutes that apply to you that didn't before. 

As soon as you sign your marriage license, both your and your partner's assets are subject to distribution in the event of a divorce. Many people believe assets owned prior to marriage are automatically protected, but that's not necessarily true. Whether you've worked a lifetime to build them or acquired them recently, those assets may be affected. To ensure your financial intentions are clear and protected, a prenuptial or postnuptial agreement can be a helpful tool for both partners.

Most people are familiar with prenuptial agreements from media coverage of high-profile marriages and divorces of the rich and famous. It's only natural that many believe prenups and postnups – which are agreements that are arrived at after vows are exchanged – are just for the wealthy. But that isn't the case. The truth is that any marriage (or individual in a marriage) can benefit from the structure and planning that these agreements provide.

It's surprising, then, that only a fraction of marriages have prenuptial or postnuptial agreements, given how they can protect both partners in marriage. Most entrepreneurs recognize that it would be foolhardy to enter into a business partnership without an operating agreement in place. These agreements are just part of business culture. Why aren't they part of marriage culture, where the stakes are often even higher?

Couples that prenup together, stay together

It can be difficult to talk to your fiance about setting up a prenup. If not approached the right way, the conversation can quickly devolve to mistrust or one side feeling pressured. But it doesn't have to be that way. 

This is not a time to strong-arm your future spouse into something they aren't comfortable with. It is instead a time to share your visions for possible financial futures, to discuss how protecting different assets can actually benefit both individual and family goals, and to come up with a plan that works for both of you.

A prenup can also mean getting ahead of potential issues that may come up later. Arguments over finances are one of the most common drivers of divorce. Having those difficult conversations and coming to a consensus before the wedding can help create a stronger foundation for the marriage. 

I've assisted countless couples with prenups over the past two decades, and none that I am aware of have filed for divorce. Studies have shown that couples with prenups are less likely to get divorced. Newer studies are needed to see if this effect has held up amid changing attitudes — about half of adults now say they're open to signing a prenup – but the evidence we have is encouraging.

The courts are shifting on this issue as well. Once very skeptical of prenups, courts are now likely to enforce these agreements — so long as they are crafted properly.

For example, many prenups include sunset clauses, nullifying the agreement after 10 or 20 years. These clauses prevent inequities. For example, if one spouse has signed a strict prenup that allows them very little, if they then are faced with divorce after 25 or 30 years of marriage, it could be a very difficult situation.

But the wording of these clauses (and everything in the agreement) has to be precise. I know of one case that hinged on the fact that a 10-year sunset clause stated the couple had to be divorced — a process that can itself take years. It makes more sense to have the trigger be the initiation of a divorce action.

It's never too late to postnup

Along with the increasing popularity and enforceability of prenuptial agreements, postnuptial agreements have been gaining legal and cultural traction as well. Postnups are just like prenups, but signed by spouses that are already married. 

Couples who didn't sign a prenup can still create their "operating agreement," so to speak, with a postnup. And just as spinning up a new line of business for a company could necessitate changes to the operating agreement, a postnuptial agreement can help you protect a new venture in the unfortunate event of a divorce.

Entrepreneurs often request postnuptial agreements ahead of launching a new company. For some, their marriages are happy and stable but they take this step to reassure a business partner that the company's operations would not be adversely impacted by future divorce litigation.

In other cases, the future of the marriage may be in question, and the entrepreneur doesn’t want to wait to start their new business as the couple attends counseling and works on their relationship. Postnuptial agreements can also be utilized to protect unanticipated assets such as inheritances, lottery winnings or lawsuit proceeds in the event of future divorce litigation.

When there is some tension in a marriage and divorce is being discussed, getting a postnuptial agreement can sometimes remove some of the pressure. Essentially outlining what the divorce settlement would be can be easier when you’re still on fairly amicable terms. Putting worry about financial questions to rest can help the couple focus on resolving their issues and staying together.

Every marriage — like every business — begins with optimism and good intentions. Business partners are able to maintain that positivity through the process of creating an operating agreement. Romantic partners can do the same, and structuring the business aspect of their marriage can pay dividends — whether they divorce or live happily ever after.

Jon T. Kukucka is partner in the Family Law practice at the law firm Pullman & Comley with offices in CT, MA, NY and RI.