[WSBAPT] ante-nuptial agreement : effective against creditors?

[Josh Grant]

This is an estate planning type question.
W is a client whose husband’s business corporation appears to be raking up a lot of business debt. This is a second marriage and they have tried to keep their finances separate, in fact the income from the business has been used for community benefit (food, electricity, vacations etc.).  W has a separate asset she wants to protect (farm land given by dad).  H&W never did a pre-nuptial agreement.  Been married 10 years+.

H&W thought a ante-nuptial  agreement might help protect W’s separate asset.  H had it drawn up and W was referred to me as her  independent attorney.  This is a standard type of agreement where on schedule “A” the business corp is listed as H’s, and W’s is listed as her separate asset.

My thought is that basically, as long as they are married, or as long as they do not have  a separation decree, that whatever they sign between them won’t help against creditors.  (just like the client who has to pay a community debt even after that debt was listed as the responsibility of the former spouse in a dissolution decree).  If I were a creditor’s attorney I would ask the court to pierce the corporate veil and determine that the corp is a community asset and the debt is a community debt and go after all community property, again without regard to this agreement.

I think if ever sued, judgment would be entered against H&W and their marital community, and the separate farmland wouldn’t be affected anyway.  If a creditor tried to get a judgment against W’s separate property, then she could hire an attorney and get the court to enter a judgment only against the community and community property, with or without an agreement.

Anyone think a ante-nuptial agreement would be a substantial protection for W against business debts, even if H is a sole shareholder?

Josh Grant

Joshua F. Grant, PS
Attorney at Law
P. O. Box 619
Wilbur, WA 99185
tel 509 647 5578
fax 509 647 2734


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