For many professionals, their practice is more than a source of income—it is the result of years of education, financial investment, and personal dedication. Whether you are a doctor, lawyer, accountant, architect, or other licensed professional, your practice represents your livelihood and professional identity. Without proper planning, divorce can jeopardize both.
An Orlando prenuptial agreement lawyer can help you protect your professional practice before you marry. A tailored prenuptial agreement can prevent your practice from becoming part of marital property, shield its value from division, and ensure you maintain control of the business you worked so hard to build.
Why Professional Practices Are Vulnerable in Divorce
In Florida, marital property is divided under equitable distribution laws. This means property acquired during the marriage—regardless of whose name is on the title—may be subject to division in divorce. Even a professional practice established before marriage can be at risk if its value increases during the marriage due to marital efforts or resources.
Risks include:
- A spouse obtaining an ownership interest in the practice.
- The court awarding the spouse a share of the practice’s value.
- Disruption of daily operations during divorce proceedings.
- Forced liquidation or sale of practice assets to satisfy an equitable distribution award.
An Orlando prenuptial agreement lawyer will address these risks directly in your agreement.
Classifying the Practice as Separate Property
The first step in protecting a professional practice is to classify it as separate property in the prenuptial agreement. This can be done by:
- Identifying the practice in detail, including its legal structure and ownership documents.
- Stating explicitly that it remains the sole property of the professional spouse.
- Prohibiting the transfer of ownership or control to the non-professional spouse.
This classification ensures the practice itself is not subject to division in divorce.
Addressing Appreciation in Value
Even if the practice is separate property, its appreciation during the marriage can be treated as marital property in Florida if the growth is due to marital contributions. For example, if the professional spouse works in the practice during the marriage, the increase in value may be considered marital.
Your prenuptial agreement can:
- Declare that all appreciation remains separate property.
- Differentiate between passive growth (such as market forces) and active growth (such as the professional’s labor).
- Include provisions to compensate the non-professional spouse in other ways without granting ownership rights.
Protecting Professional Goodwill
Professional practices often have significant goodwill, which can be either personal goodwill or enterprise goodwill:
- Personal goodwill is tied to the professional’s reputation, skills, and relationships.
- Enterprise goodwill is tied to the business itself and can exist independently of the professional.
Without a prenuptial agreement, disputes over the value of goodwill can be contentious. Your agreement can:
- Exclude personal goodwill from marital property.
- Define how enterprise goodwill will be valued and whether it is subject to division.
An Orlando prenuptial agreement lawyer will draft clear language to prevent these disputes.
Restricting Spousal Involvement in the Practice
Some spouses may contribute to the practice by working there or providing support services. This can complicate property classification and lead to claims for a share of the value. Your prenuptial agreement can:
- Set clear boundaries for spousal involvement in the practice.
- Define any compensation for work performed by the spouse.
- State that such work does not create ownership rights.
Preserving Confidentiality and Client Relationships
Professional practices rely heavily on client trust and confidentiality. Divorce proceedings can expose sensitive information unless protections are in place. Your agreement can:
- Limit access to client files and records.
- Protect the confidentiality of financial and operational documents.
- Prohibit disclosure of proprietary information during and after divorce.
An Orlando prenuptial agreement lawyer will ensure these provisions comply with professional ethics and licensing requirements.
Aligning with Licensing and Regulatory Rules
Many professions, such as medicine and law, have strict rules about ownership and control of practices. Your prenuptial agreement should:
- Prevent non-licensed spouses from gaining ownership rights.
- Comply with state and professional regulations.
- Avoid provisions that could jeopardize your license.
Addressing Practice Real Estate and Assets
If you own the real estate where your practice operates or valuable equipment, these should be addressed in the agreement:
- Classify practice real estate as separate property.
- Define how rental income will be handled.
- Protect equipment and other tangible assets from division.
Income from the Practice
Without a prenuptial agreement, income earned during the marriage is generally considered marital property. Your agreement can:
- Classify all income from the practice as separate property.
- Specify how distributions or profits will be used.
- Prevent income from being commingled with marital funds.
Managing Business Debt
If your practice carries debt, a prenuptial agreement can:
- Assign responsibility for business debt solely to the professional spouse.
- Prevent marital assets from being used to satisfy practice liabilities.
- Protect the non-professional spouse from being personally liable for business obligations.
Preventing Commingling of Assets
Commingling occurs when separate and marital assets are mixed, making it difficult to determine ownership. This can turn a separate practice into marital property. Your agreement can:
- Require separate accounts for practice income and expenses.
- Prohibit the use of marital funds for practice operations without written consent.
- Establish reimbursement provisions if commingling occurs.
Coordinating with Other Business Agreements
If you have partners, shareholders, or an operating agreement for your practice, your prenuptial agreement should align with these documents. This avoids conflicts and ensures all agreements work together to protect the practice.
An Orlando prenuptial agreement lawyer can work with your business counsel to create a cohesive legal strategy.
Protecting Intellectual Property Associated with the Practice
Some practices own intellectual property such as trademarks, patents, or copyrighted materials. Your agreement can:
- Classify all pre-marital intellectual property as separate property.
- Protect income from licensing or selling IP rights.
- Prevent the spouse from acquiring any interest in the IP.
Succession Planning and Estate Coordination
Your professional practice is also a key part of your estate. Your prenuptial agreement should coordinate with your estate plan to:
- Preserve succession plans for the practice.
- Protect inheritance rights for children or other beneficiaries.
- Define your spouse’s rights to the practice in the event of your death.
Enforceability Requirements in Florida
For your prenuptial agreement to be enforceable in Florida, it must:
- Be in writing and signed before the wedding.
- Be entered into voluntarily, without coercion.
- Include full and fair disclosure of each party’s financial situation unless waived in writing.
- Contain terms that are not unconscionable or contrary to public policy.
An Orlando prenuptial agreement lawyer will ensure these requirements are met.
Updating the Agreement
Your practice may grow or change significantly during the marriage. A prenuptial agreement can be updated through a postnuptial agreement to:
- Add new practice locations or assets.
- Adjust provisions based on changes in value.
- Modify spousal support terms in light of career developments.
Regular reviews help keep your protections relevant and effective.
Frequently Asked Questions
1. Can a prenuptial agreement fully protect my professional practice?
Yes. If drafted correctly, it can classify the practice as separate property and protect its value from division.
2. What if my spouse works in my practice during the marriage?
Your agreement can define their role and compensation and clarify that work does not create ownership rights.
3. Can I protect the practice’s appreciation in value?
Yes. Your agreement can specify that all appreciation remains separate, even if it occurs during the marriage.
4. Will the agreement affect my professional license?
No, if drafted properly. Your lawyer will ensure compliance with all licensing rules.
5. Can the agreement address practice debt?
Yes. It can assign responsibility for business debt solely to the professional spouse.
6. Can I protect income from the practice?
Yes. Your agreement can classify all income as separate property if both parties agree.
7. What about goodwill?
Your agreement can exclude personal goodwill from marital property and define how enterprise goodwill will be valued.
8. Can the agreement prevent my spouse from accessing client files?
Yes. Confidentiality provisions can protect client relationships and sensitive information.
9. Should my agreement match my partnership or shareholder agreement?
Yes. All agreements should be consistent to avoid conflicts.
10. Can we change the agreement after marriage?
Yes. You can update it with a postnuptial agreement as circumstances change.
The McKinney Law Group: Experienced Orlando Attorneys for Prenup Planning
We guide Orlando clients through every step of creating a prenup, from initial conversations to final signatures, ensuring the agreement is fair, enforceable, and built to last.
Call 813-428-3400 or email [email protected] to learn more.