Pre-Nup for a family business (Full Version)

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gmm28 -> Pre-Nup for a family business (9/23/2008 11:14:22 PM)

I'm in the situation of going back to a family business. 2 family members and I will be operating this business, with distant relatives holding some shares of the company. They get a check while we do the work type of thing.

The problem is, it was advised to me that me and my fiancee sign a pre-nup for this business to protect the business in case of an emergency. I love her to death, as does my family, and I will not and would never leave her.

My question is, what could I do to convince her to sign this pre-nup, that we don't really need (it's just a technicality), even though I am not worried about anything happening to us in the future? Right now she is incredibly upset about it, which is understandably so.

Any advice or thoughts are appreciated.



GroupW -> RE: Pre-Nup for a family business (9/24/2008 12:05:48 AM)

It's not uncommon for business partners to want to make sure that a divorced spouse doesn't become a major shareholder. I'd check with a lawyer to see what other alternatives may exist. There may be options here that you're not thinking of.

That said, it's a very sticky issue. There are legitimate reasons for your partners to want this, and legitimate reasons for your honey to blow a gasket over it.



SurpassingPeace -> RE: Pre-Nup for a family business (9/24/2008 4:31:32 PM)

Have you thought of incorporating the business? I believe this would take care of the prenup as well as protect you from personal liabilility in a variety of other situations. Many people don't realize it is relatively easy and inexpensive to incorporate a business. This would serve to protect the others in the business. I would consult an attorney in your state for the particulars necessary.

Karen



allisonbrett -> RE: Pre-Nup for a family business (9/24/2008 5:02:52 PM)

There are both positive and negative aspects of prenups.

Many people look at a pre-nup as pre-divorce or "just in case...." From one side it almost seems like you are planning for divorce but then from a reality in our world it's like you are protecting your assets and business partners. No one wants to be unprepared but it can lead one to think that trust is not solid. Tough call. Pray about it before setting on a course. Once out you can't take it back.

There are many avenues of business ownership that you may want to explore. Incorporating may seem like a great option but the tax issue with inc can be more than you are bargaining for. Check with a CPA or tax consultant and an attorney to know which route to take. Do your homework into S-corps, LLC's, partnerships as as the traditional inc. to determine what will work best for you all. Make sure you pray about what avenue to take. Just know that business ownership is not for wimps so be prepared for some harsh realities, sleepless nights and stressed bank accounts. Ask me, I know first hand!! [:D]



tn1 -> RE: Pre-Nup for a family business (9/24/2008 5:17:00 PM)

Actually, a pre-nup is a good idea for any couple where one or both parties have any significant financial resourses or debt. It simply recognizes the 50% possibility that the marriage might end in divorce. We all enter marriage with the best of intentions, but to ignore the 50% possibility that one's marriage might end in divorce reminds me of the proverbial ostrich burying its head in the sand.

In Biblical ancient near-eastern cultures, including the Jews, the ketubah, marriage contract/covenant declared such financial issues. The dowry served a similar purpose. The dowry was typically 1 year's salary (the bride price) plus the woman's full family inheritance. If a man decided to divorce his wife for selfish reasons (the hateful divorce), then he had to pay her the full dowry. If she in some way broke the marriage covenant, he did not have to pay her anything. The dowry system was set up to protect women and to reduce the number of divorces.



pbaribeault -> RE: Pre-Nup for a family business (9/24/2008 5:27:20 PM)

She might be more understanding if you try to express yourself in a way like, "I know we will be married forever. I'd never marry you and the try to make sure that I had a back door open. I know you and I love you... but my business partners don't know you like I do. What they know is that love is blind and 50% of marriages end in divorce. I don't think that signing off that you won't continue to own business shares if our marriage dissolves is immoral or all that insulting. Firstly, becuase I know it would never happen, and secondly, if I fail you so spectacularly that you can no longer live with me, I know that you would never want to take business shares away with you. That's not the kind of person that you are... so why not just sign to show that that's not the kind of person that you are... and on our 60th anniversary, when most of them are dead, we'll laugh that they didn't have faith in us for the long run!"



jaimestarcross -> RE: Pre-Nup for a family business (9/25/2008 12:59:14 AM)

Questions for you....
did all the other business partners sign pre-nups?

Are you signing a pre-nup?

Why not incorporate the business?



gmm28 -> RE: Pre-Nup for a family business (9/25/2008 7:24:01 AM)

As far as I can tell, at least 1 if not both partners have signed a pre-nup. One of the partners have told me that it is just something our accountant recommended, as it is just a technicality that will keep everything in the family and ensure the survival of the business should something happen in our marriage (which would kill me if it did).

I appreciate all of your responses. It's nice getting other people's view of things. I've tried to tell her it's just a technicality and that I love her forever and for always. I told her it's nothing my business partners have against her because they love her to death as well. She just feels that it's all about money and that the pre-nup just says that she can be family as long as it doesn't pertain to the business. Last time we discussed it she agreed to sign it, but it still tore her up emotionally.



MC4JC -> RE: Pre-Nup for a family business (9/25/2008 9:12:38 AM)

Personally I don't like pre-nups except in certain cases. In general, unless you are making millions of dollars, then I would never sign a pre-nup.

But in this case, its business partnership. IF the other family members have pre-nups with their spouses, then there should be no reason your fiancee should not agree to it.



Sadey -> RE: Pre-Nup for a family business (9/25/2008 9:40:45 AM)

I understand her feelings. In some families you may marry into it but never are really family. Maybe thats what she is hearing? Being in a family business is tough, marrying into one is tougher.

Is your business set up that if you die she is taken care of? Or does everything you worked for go back to the family? I would suggest that you have a lawyer for her so she can make sure that she and her future children will be provided for.



GroupW -> RE: Pre-Nup for a family business (9/25/2008 10:12:20 AM)

quote:

ORIGINAL: Sadey

I understand her feelings. In some families you may marry into it but never are really family. Maybe thats what she is hearing? Being in a family business is tough, marrying into one is tougher.

Is your business set up that if you die she is taken care of? Or does everything you worked for go back to the family? I would suggest that you have a lawyer for her so she can make sure that she and her future children will be provided for.


Definitely good points to think about there.



jaimestarcross -> RE: Pre-Nup for a family business (9/25/2008 2:22:03 PM)

Don't discount her feelings...
if she feels that strongly about the pre-nup(it's not just a technicality to her) -she shouldn't be pressured into signing... it's not a loving thing to
do to the woman who'll one day be your wife and mother of your children.

I would let the subject drop - it's not worth all the emotional
upheaval and stress.



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