Managing your love life and business life can be challenging for anyone — especially when the two are intertwined.
In June, singer Mary J. Blige was ordered by the Superior Court of California — Los Angeles — to pay her ex-husband Martin “Kendu” Isaacs — who was also her ex-manager — $30,000 a month in temporary spousal support. Although this sum was significantly lower than the reported original demand of $129,319 per month, Blige was also ordered to pay support retroactively, and attorney fees.
If you’re an entrepreneur, investor or company owner intertwined in a business endeavor with your significant other, this case may be sounding an alarm.
And you’re justified in feeling this way: Regardless of the size of your business, tying the knot changes more than the legal logistics of your personal life; it can also affect your business. Consulting with an attorney and signing a pre-nuptial agreement, or at least learning what factors can impact spousal support could be one of the most cost-efficient and reliable steps you can take to protect your business and yourself.
Pre-nuptial agreements and your business
In the Blige case, in large part, she is the business. And as she has pointed out, she built a successful brand prior to this marriage and prior to her spouse acting as her manager. This scenario, in which one spouse built a business prior to the other spouse joining him/her in business and in marriage, is a familiar one to many.
Still, the particular business in question — a platinum-selling R&B artist — probably isn’t. There are lessons to be learned from this celebrity case for more traditional business owners. First and foremost? The pre-nup.
Historically, pre-nuptial agreements have been associated with the anticipation of a failed marriage; but from a family-lawyer perspective, that’s not necessarily an accurate perception. While these agreements may not be right for everyone, they’re at least worth a discussion by any couple, particularly when a business is involved, to determine whether a pre-nup is right for them.
Statutes regarding the distribution of marital property are fairly complex and subject to interpretation. Before entering into marriage (often the biggest partnership of all), it’s wise for you to find out what your state statutes would require were there a separation. You should then define (or create) the terms you want applied.
What’s smart here is knowing, planning and acting with intention ahead of the fact rather than acting on the unknown or making decisions muddied with the emotions that accompany the dissolution of the relationship.
Whether you’re a new entrepreneur or a seasoned business owner getting ready for marriage, it’s important to know what constitutes “ownership” of the business. In the family law arena, ownership is not always dictated by title. In many states, like North Carolina where my firm is headquartered, the fact that one party is not a title owner of an asset does not mean that he or she does not have an ownership interest in that asset.
While one spouse may own 100 percent of a business and operate it every day, the other spouse may still have a marital interest in that business depending on when it was started, whether it has grown actively or passively during the marriage, and so on.