Protecting Your Family-Run Business with Pre- and Post-Nuptial Agreements

If you own a family-run business and have adult children working with you—or you’re contemplating bringing them into the business—now is the time to think long-term. Your lack of proactive planning could jeopardize not only your business but your legacy, your children’s financial future, and your grandchildren’s stake in the family enterprise.

One powerful and underutilized tool in this area? Prenuptial and postnuptial agreements.

And if you’re a business attorney, CPA, financial advisor, estate planner, insurance agent, succession planner, or family office consultant, understanding how these agreements function in business continuity and asset protection is an essential value-add for your clients. This is your opportunity to help them avoid costly, preventable risks.

Start the Conversation Before They’re Engaged

The best time to talk to your adult child about a prenup isn’t right before the wedding. It’s before they have a serious partner, when emotions aren’t yet in the picture and business protection is just that—business.

While it’s still possible to put an agreement in place after a relationship is established, doing so late can create tension. Future spouses may feel untrusted or alienated, and you risk planting seeds of division before the marriage even begins.

What a Prenup Can Do for a Family Business

An effective prenuptial agreement can do more than protect your adult child—it can preserve the business for generations. Here are just a few examples:

• Ensure Ownership Stays in the Family: In the event of a divorce, the prenup can establish that your adult child’s ownership interest, income, and profits from the business remain their separate property.
• Prevent Outside Claims: While a spouse might receive a portion of earnings during the marriage, the underlying ownership—voting rights, long-term control, brand legacy—can remain with your child and the family.
• Exclude Inheritance from Division: The prenup can allocate future inheritance rights (such as specific property or business shares) to your grandchildren while excluding the adult child’s spouse or children from a previous marriage.
• Protect Confidential Business Info: Confidentiality clauses can ensure the inner workings of your family business stay private—even in the face of a contentious split.

California’s Community Property Rules—And How to Work Around Them

California is a community property state, meaning everything acquired during the marriage is presumed to be split 50/50. But here’s the good news: Prenuptial agreements override community property rules—as long as they’re done right.

The key to enforceability includes:

• At least seven days for review before signing the agreement
• Independent counsel for each party
• No coercion, and full disclosure of finances
• A document that’s “written right and tight”

What often derails a prenup? Procrastination. We frequently see one party delay the conversation until the last minute, which undermines the enforceability. If you’re too close to the wedding day, wait until after and create a postnuptial agreement instead. It’s not ideal, and sometimes harder to get buy-in once the marriage has begun—but if that’s the case, it may reflect underlying issues in the relationship that are worth noting.

The Best Protection Strategy? Layered Legal Tools

Prenups aren’t the only tool in the toolbox. At Sapere Law & Mediation, we work hand-in-hand with asset protection experts like Attorney David Shoup at California Business Formations to add even more protection through:

• LLCs and Corporations
• Trust structures
• Leasing and holding entities

In a state as litigation-prone as California, smart business structuring is your best offense and defense.

And for advisors working with high-net-worth or family business clients—pre- and post-nups, when paired with strong entity planning, should absolutely be part of the conversation. Not just to protect the current generation—but to safeguard multigenerational success and prevent future legal landmines.

Mediation: A Better Way to Create Your Agreement

Sometimes couples (or their parents) want to avoid the tension of negotiating a prenup through separate attorneys. That’s where we step in. As family law mediators, we help couples negotiate the terms of a prenup or postnup in a safe, confidential, and guided setting—allowing for honest discussion, reduced pressure, and mutual understanding.

Once the agreement is finalized, each party takes the draft to their own independent attorney for legal review and final sign-off, as required by law.

Future-Proof Your Family Business

Your family business didn’t come easily. You’ve built it with hard work, long hours, and vision. Don’t let a lack of planning risk its future.

Whether you’re a business owner with adult children or a young entrepreneur starting a legacy of your own, let’s talk about how to use pre- and post-nuptial agreements—and strategic legal structuring—to protect what matters most.