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Protecting Tech Startups And Wealth During Divorce

Technology seems as if it is advancing faster and faster every day. Entrepreneurs in California are taking advantage of this fast-paced environment to found tech startups or even to invest in promising companies. This is an exciting time in the tech world, but many people are heading straight into it without taking any precautions. For example, few startup founders consider what might happen to their companies and wealth during divorce.

When a tech startup makes it big, its founder may experience a gradual or even sudden increase in his or her wealth. If the individual is married, that wealth is considered community property even if the spouse had nothing to do with the business. Getting divorced would leave that wealth vulnerable during property division and could even compromise the stability of the startup. This is because California is a community property state, so the money and assets from the business would be split evenly between the two parties.

However, some startup founders and business owners do not feel like this system is particularly fair when it comes to businesses. Simply thinking that something is not fair does not change anything, though. Using a prenuptial agreement can, though.

Some people might find the idea of creating a prenuptial agreement pessimistic or unromantic, but entrepreneurs in California’s technology industry know just how important it is to consider as many possible outcomes for the future. Whether a founder is still in the early days of his or her startup or is planning to launch in the coming months or years, protecting the associated interests and wealth is essential. A carefully worded prenuptial agreement or a postnuptial agreement if the parties are already married can do just that.

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