For business owners going through a divorce, many may wonder, “Do you need a prenup if you own a business in California?” While California does not require business owners to sign a prenuptial agreement before marriage, creating a prenup allows spouses to agree to important financial provisions upfront.

Without an agreement in place, California community property and prenup laws could allow your spouse to obtain an interest in your business’s value or income earned during marriage even if the company was established long before marriage.

About Benefield Faulk Law – Family Law Trial Advocates P.C.

Tamara Benefield has been serving clients throughout California since 2004. Attorney Tamara Shari Benefield has 25 years of experience in family law. Benefield focuses her practice on high-asset divorce and contested family law matters. Her extensive litigation, evidence, and financial background are especially helpful when preparing legal strategies around marriage dissolution involving complex business interests or assets.

How Marriage Can Affect a California Business

California law characterizes property acquired during marriage as community property by default. Separate property includes most things owned before marriage. If one spouse founded a company before getting married, that business may start as their separate property. However, simply because a spouse owned a business before marriage does not mean every aspect of that company is going to remain separate after marriage. Other family law matters that may arise include child custody, interstate child custody, civil restraining order requests, grandparents’ rights, and guardianship.

For instance, assume that one spouse had founded a consulting business in Beverly Hills prior to marriage. After getting married, the spouse continues to work at their company, which increases in value substantially. The issue becomes whether the marriage obtained an interest in the appreciated value. Salary, contributions made during the marriage, earnings put back into the business, and efforts of the owner spouse may become issues considered.

A prenup allows couples to address these questions before they become issues in a divorce. An agreement can specify that your business should remain separate property. It can also define how the future appreciation, income, or distributions from the company are going to be treated.

What to Include in Your California Prenup Related to Your Business

In California, Family Code § 1612 clearly states that parties may enter into contracts concerning property rights and obligations. With that broad of a definition, a prenuptial agreement can cover:

  • Whether an existing business is going to be considered separate property
  • Whether business income, distributions, investments, or debts incurred during marriage are going to be considered community or separate property
  • Who is going to retain interest in the business if the couple ends up divorced
  • Who obtains ownership interest in the other’s company
  • The role of the other spouse within the business, such as having a management position

An agreement may even reduce uncertainty over whether business records, valuation evidence, or ownership interests become court-disputed during divorce. These considerations can be particularly important in executive divorce, grey divorce, property division, spousal support, high-net-worth divorce, and same sex divorce cases.

Making a Prenup Enforceable in California

In California, a prenup isn’t automatically valid because both spouses signed it. California Family Code § 1615 lists several ways a premarital agreement can be unenforceable. Two of these provisions involve requirements around voluntariness and disclosure. The law states a prenup is not valid if it was not entered into voluntarily by both spouses or the statutory disclosure requirements were not met.

California also imposes timing requirements on when prenups can be signed. Generally speaking, there should be seven calendar days between the time the party was first given a copy of the final agreement and the time the party signed it.

California Business Ownership by the Numbers

Prenups can be especially helpful in California since so many residents own businesses. According to the U.S. Small Business Administration’s 2025 California Small Business Profile: 

  • California is home to about 4.3 million small businesses.
  • Small businesses make up 99.8% of all businesses in California.
  • About 7.6 million people work for small businesses in California. That’s 47.4% of California employees who work at small businesses.

Between March 2023 and March 2024, the SBA also reported that 245,382 California establishments were opened. During that same time period, 183,211 California businesses closed. This highlights how frequently Californians initiate and discontinue business ventures throughout their lives. Other legal matters that may require guidance include domestic violence, civil contempt, paternity, postnuptial agreement preparation, prenuptial agreement preparation, wills & trusts, and attorney fee motions.

Beverly Hills business owners with questions about these issues likely own professional businesses. Family law cases in central Los Angeles County are centralized at the Stanley Mosk Courthouse located at 111 North Hill Street, Los Angeles, CA 90012. A California prenuptial agreement attorney can help you in your prenup case.

FAQs

Can You Keep Business Separate Without a Prenup?

Yes, in many cases you can keep a business separate without a prenup, deeming it separate property instead of community property. However, the property may be considered community if the business grows during marriage thanks to the efforts of either spouse or investment of community funds.

Remaining diligent with financial records, preventing commingling where possible, and keeping records of business investment made with separate funds can help distinguish portions of the business that remain separate without a prenup.

If My Wife Owns a Business, Do I Also Own It?

If your wife owns a business, you may own it as well, but this is not always true. If your wife owned the business prior to marriage, it may be considered her separate property. If she acquired it or started it during marriage, then California’s community property rules may entitle you to a portion of the business even if it’s only in her name.

What Voids a Prenup in California?

In California, a prenup may be voided if one spouse did not sign the agreement voluntarily, or the agreement was unconscionable. A prenup may also be voided if the spouses failed to provide adequate financial disclosure or waived the right to receive financial disclosures. It’s worth noting that prenups that include forbidden topics, such as child support, cannot be enforced.

How Much Does a Prenup Cost in CA?

The cost of a prenup in California depends on the specifics of the case. California doesn’t have standard pricing for prenups. The cost of your prenup depends on factors like the complexity of your agreement, how your attorneys bill, if negotiations are needed, and how many assets you’re dividing. Simple agreements are generally less expensive than those that are more complex.

Hire a Trusted Prenuptial Agreement Lawyer

A prenuptial agreement can help you protect your business assets in the event of a divorce. We recommend that you hire a prenuptial agreement lawyer to assist. Benefield Faulk Law – Family Law Trial Advocates P.C. can help. Contact us today for more information.