To protect your family enterprise from a future divorce in New Brunswick, your marriage contract must explicitly exclude your business shares, corporate assets, and future growth from the standard equal division of marital property.
Owning a business in New Brunswick involves significant labour, risk, and dedication. 🏲 Whether you operate a tech startup in Fredericton, a fishery in the coastal towns, or a retail shop in Moncton, your business is likely one of your most valuable assets. Unfortunately, without a legal safety net, a divorce could force you to liquidate your company to pay out your ex-spouse.
Under New Brunswick’s Marital Property Act, the value of assets acquired during the marriage, and the increase in value of assets brought into the marriage, are generally split 50/50. A meticulously drafted marriage contract (prenup) allows you to bypass these default rules, ensuring your business stays strictly in your hands if the relationship ends.
Step-by-Step Process in New Brunswick
Protecting commercial assets requires a more complex legal approach than a standard property agreement. 📋 You need to address not just the current value of the business, but its future trajectory. Here is the typical process.
Step 1: Acquiring a Professional Valuation
Before you can protect your business, you must determine its exact current worth. You will likely need to hire a Chartered Business Valuator (CBV) to assess your company. Providing an accurate, formal valuation satisfies the legal requirement for full financial disclosure and prevents your spouse from claiming you hid assets later on.
Step 2: Defining the Exempt Assets
Your family lawyer will draft specific clauses defining exactly what is excluded from the marital property calculation. This typically includes your shares in the corporation, equipment, inventory, and any future dividends. 🔒 You must be incredibly precise; vague language can leave loopholes that a spouse’s lawyer might exploit during a divorce.
Step 3: Addressing Future Growth
If you owned the business before marriage, the original value is usually exempt by default. However, any increase in value during the marriage is normally divisible. Your marriage contract must explicitly state that any future growth, appreciation, or expansion of the business will remain exclusively yours.
Step 4: Securing Independent Legal Advice
Because your spouse is giving up their legal right to a potentially massive financial asset, they must receive Independent Legal Advice (ILA). ⚔ Their lawyer will explain the implications of signing away rights to the business. Without ILA, a judge at the Court of King’s Bench is highly likely to strike down the business exemption clauses.
How Much Does it Cost in New Brunswick?
Drafting a marriage contract that deals with corporate assets is more expensive than a standard agreement, but it acts as vital insurance for your company’s survival. 💰
- Business Valuation: Hiring a professional CBV in New Brunswick to value a small to medium enterprise usually costs between $2,000 and $5,000 CAD.
- Corporate Marriage Contract: A local law firm will generally charge between $2,500 and $5,000 CAD to draft a complex agreement with corporate exclusion clauses.
- Independent Legal Advice: Your spouse’s lawyer will charge roughly $500 to $1,000 CAD to review a complex, business-focused agreement.
| Business Appraisals (CBV) | $2,000 – $5,000 CAD | Crucial for accurate financial disclosure. |
| Drafting by Family Lawyer | $2,500+ CAD | Ensures the contract holds up in court. |
| Spouse’s ILA | $500 – $1,000 CAD | Prevents claims of duress or misunderstanding. |
How Long Does the Process Take?
Securing a business through a marriage contract takes significantly longer due to the valuation phase. ⌛ Having a professional valuator review your corporate tax returns, profit margins, and assets can take 4 to 8 weeks.
Once the valuation is complete, drafting the contract and negotiating terms through lawyers typically takes another 4 to 8 weeks. If you are planning a wedding, you should begin this entire process at least 4 to 6 months in advance.
Frequently Asked Questions (FAQ)
What if my spouse works for my business?
If your spouse contributes labour to the business, they might claim a portion of its value through a “constructive trust.” Your contract must address this, perhaps by ensuring they are paid a fair market salary so they cannot claim unpaid equity later.
Does a prenup protect against business debts?
Yes, a well-drafted marriage contract can state that any business debts or corporate liabilities belong solely to the business owner and cannot be transferred to the spouse.
Can I protect businesses I haven’t started yet?
Yes. You can include forward-looking clauses that exempt any future corporations, partnerships, or ventures you might create during the marriage.
What if the business is owned with other partners?
If you have business partners, your Shareholders’ Agreement might actually require you to get a marriage contract. This ensures your ex-spouse cannot suddenly become a voting shareholder in the company.
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