Agreement Among Business Partners to Require Prenuptial or Postnuptial Agreements

AGREEMENT AMONG BUSINESS PARTNERS TO REQUIRE PRENUPTIAL OR POSTNUPTIAL AGREEMENTS

This Agreement is made this _____ day of _________________, 20_____, by and among the undersigned owners of ______________________ (“the Company”), whether such Company is organized as a partnership, limited liability company, or closely held corporation (each a “Partner,” “Member,” or “Shareholder,” as applicable, and collectively, the “Owners”).

RECITALS

1. The Owners desire to maintain the continuity, control, and stability of the Company.
2. The Owners recognize that a marriage, divorce, or separation of any Owner could jeopardize that stability by creating a potential spousal claim to an ownership interest.
3. Each Owner therefore wishes to enter into this Agreement to require appropriate marital-property waivers and to protect the Company’s ownership integrity.

TERMS

1. Consideration.

The mutual promises and covenants contained in this Agreement constitute sufficient consideration for all purposes.

2. Requirement to Execute Prenuptial or Postnuptial Agreement.

1. Any unmarried Owner who intends to marry shall, prior to the marriage, execute a prenuptial agreement with the prospective spouse.
2. Any Owner who is already married and has not executed such an agreement shall obtain a postnuptial agreement from the spouse.
3. Each marital agreement shall include a waiver and release by the spouse of any present or future right, title, or interest—statutory or equitable—in the Owner’s interest in the Company.

3. Scope of Waiver.
The waiver shall apply to:

• all ownership interests now held or later acquired by the Owner;
• any appreciation, distributions, or proceeds derived therefrom; and
• any claim arising from community property, equitable distribution, or similar marital-property laws in any state or territory of the United States.

4. Definition of Dissolution of Marriage.

For purposes of this Agreement, a marriage is deemed “dissolved” when the spouses no longer maintain a principal residence together as a married couple and either (a) a proceeding for separation, divorce, annulment, or dissolution has been commenced, or (b) a written separation agreement has been executed.

5. Estate-Planning Coordination.

Each Owner agrees to make reasonable efforts to provide that any testamentary gifts to a spouse are satisfied, to the extent practicable, from assets other than the Owner’s Company interest.

6. Acknowledgment of Independent Counsel.

Each Owner acknowledges reading this Agreement, finding it fair and reasonable, entering into it voluntarily, and having had the opportunity to seek independent legal advice.

7. Optional Remedies for Breach. (Select one or delete entire clause as desired.)

1. Buyout Option: If an Owner marries or remains married without the required marital agreement, the other Owners shall have the option to purchase that Owner’s Company interest at fair market value determined by an independent appraiser.
2. Conversion Option: Alternatively, the non-complying Owner’s voting rights may automatically convert to a non-voting or limited-partner interest until compliance is achieved.

8. Further Assurances.

Each party shall execute any additional instruments or take such acts as may reasonably be required to carry out this Agreement’s intent.

9. Entire Agreement; Amendment.

This document represents the complete understanding among the Owners regarding its subject matter and may be modified only by a written instrument signed by all Owners.

10. Governing Law.

This Agreement shall be governed by and construed in accordance with the laws of the State of ______________________.

SIGNATURES

Each undersigned Owner acknowledges and agrees to the foregoing:

Print Name: ____________________________ Date:___________ Signature: __________________________

Print Name: ____________________________ Date:___________ Signature: __________________________

Print Name: ____________________________ Date:___________ Signature: __________________________

Print Name: ____________________________ Date:___________ Signature: __________________________

WITNESS
(optional)

 

Print Name: ____________________________ Date:___________ Signature: __________________________