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

[Mark Higgins]

Josh--some simple thoughts:

1.  Aren't you talking about a post-nuptial agreement rather than an
ante-nuptial?

2.  You don't say how the corporate income comes out of the company to be
used by the H and W for personal expenses.  Does it come out of the
corporation via salary to H or via dividends to the shareholder?  This is
critical as salary is community property and dividends are likely separate
property of H.​And, an adequate salary is important in keeping the
stock H's separate property.

3.  Did H personally guarantee the corporate debts?  I saw nothing in your
email which suggests a valid path for a creditor to pierce the veil and
impose the debt directly on H and W, unless when you say company income is
being used for personal expenses you mean the corporate check book is being
used to buy groceries.  That would be bad.

4.  I agree that nothing you mention suggests W's separate property could
be used to satisfy a debt which is community unless she also signed the
obligation.

Mark

On Wed, Sep 2, 2015 at 2:00 PM, Josh Grant <jgrant at accima.com> wrote:

> 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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-- 
Mark T. Higgins
Mark T. Higgins, P.C.
P.O. Box 57
Darrington, WA 98241
206-491-2420
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