At February’s T3Me Attorney Mary Martinelli suggested members think about who they marry as a business partner. As a follow up to this excellent and informative event, we asked Mary for some key take-aways to share with our Members.
Q: What kinds of divorce issues impact Family Businesses that many people overlook?
A: Well, there are several really. First is characterization of Property, which involves determining what is separate, what is community, and what will be co-mingled. Other issues include Family Gifting, Succession Planning, Spousal Consent for business contracts and transactions, Premarital and Postmarital Agreements, and Estate Planning that is consistent with characterization. Determining Income Available for Support purposes is also important, as are the Buy-Sell/Shareholder or Partnership Agreements as they relate to keeping business interests in the family. In addition to Discovery of business documents and information, another key issue is Joinder of third parties in divorce actions.
Q: You talked about Spousal Consent, what type of documents and processes will lead to valid consent?
A: The first step is getting an education and explanation about characterization of property and transmutation. You should also inquire about Recognition of Fiduciary Obligations, get
Legitimate independent Attorney review and advice, and consider well drafted and thorough Consent Agreements that address the following Characterization, Transmutation, Transfer, Rights and Obligations pursuant to the Family Code, Fiduciary Obligation.
Q: What can you do to avoid becoming a party in a Family Law action?
A: Seeking the advice of a skilled Family Law Attorney and having that person always available for questions is essential. Additionally, you should cooperate with the discovery process, have a good Stipulated Protected Order, have Premarital and Postmarital Agreements and avoidCo-Mingling
Q: What Shareholder Agreements and Restrictions on Stock Transfers are enforceable in Family Court?
A: In court, any agreements that is well written and thorough may be enforceable. Such agreements should be reviewed by a skilled Family Attorney before finalizing, not made in the process (or in contemplation) of a divorce, have been historically followed, are not obviously biased against “The Out Spouse”and are accompanied by a valid Spousal Consent.
Q: Who should consider a Premarital or Postmarital Agreement and how can such agreement help avoid expensive tracing and apportionment?
A: Every business owner and their children should consider a Premarital Agreement. For those who are already married, the second best alternative is a Postmarital Agreement.
Thank you so much to Mary for her excellent presentation and information. We are grateful to have such a knowledgeable resource in our FBC Family! We hope you can join us at our next T3Me when we discuss Corporate Culture with Ken Pense with LeadershipOne on May 2nd.