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<DIV>Mark</DIV>
<DIV>1. Yes, I typed too fast (or my brain worked too slow). This is a
ante-nuptial.</DIV>
<DIV>2. These are farmers, and the corporation borrows every year. The
bank puts them on a budget, and the corporation dribbles out the loan to the
farmer (not sure if it is to the corp??.. but probably) so much each month which
is used for the living expenses. I am sure it is shown as salary on the
corporate books. I will find out for sure.</DIV>
<DIV>3. I would guess that the bank requires a personal guarantee, but again....
I will find out. But I have always thought with a sole shareholder,
officer, director, that it was easy to pierce the veil... If everyone
could avoid paying taxes by incorporating and then having the corporation borrow
enough to live off of, just because the corp. doesn’t pay for the food? We
wouldn’t need car insurance.</DIV>
<DIV>4. I think this is my main point/question. If W’s separate
property is protected because she doesn’t sign the bank note, or personally
order the fertilizer, I don’t know that this post-nupt is adding any
protection.</DIV>
<DIV> </DIV>
<DIV>So lets assume a corporate salary paid to husband, he pays for food and
power. He is married. Isn’t the corporation, notwithstanding the corporate
share being H’s... a community asset? </DIV>
<DIV> </DIV>
<DIV>thanks</DIV>
<DIV> </DIV>
<DIV>Josh</DIV>
<DIV> </DIV>
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<DIV style="font-color: black"><B>From:</B> <A title=markthiggins@gmail.com
href="mailto:markthiggins@gmail.com">Mark Higgins</A> </DIV>
<DIV><B>Sent:</B> Wednesday, September 02, 2015 3:00 PM</DIV>
<DIV><B>To:</B> <A title=wsbapt@lists.wsbarppt.com
href="mailto:wsbapt@lists.wsbarppt.com">WSBA Probate & Trust Listserv</A>
</DIV>
<DIV><B>Subject:</B> Re: [WSBAPT] ante-nuptial agreement : effective against
creditors?</DIV></DIV></DIV>
<DIV> </DIV></DIV>
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<DIV class=gmail_default style="FONT-SIZE: large">Josh--some simple
thoughts:</DIV>
<DIV class=gmail_default style="FONT-SIZE: large"> </DIV>
<DIV class=gmail_default style="FONT-SIZE: large">1. Aren't you talking
about a post-nuptial agreement rather than an ante-nuptial?</DIV>
<DIV class=gmail_default style="FONT-SIZE: large"> </DIV>
<DIV class=gmail_default style="FONT-SIZE: large">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. </DIV>
<DIV class=gmail_default style="FONT-SIZE: large"> </DIV>
<DIV class=gmail_default style="FONT-SIZE: large">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.</DIV>
<DIV class=gmail_default style="FONT-SIZE: large"> </DIV>
<DIV class=gmail_default style="FONT-SIZE: large">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.</DIV>
<DIV class=gmail_default style="FONT-SIZE: large"> </DIV>
<DIV class=gmail_default style="FONT-SIZE: large">Mark</DIV></DIV>
<DIV class=gmail_extra>
<DIV> </DIV>
<DIV class=gmail_quote>On Wed, Sep 2, 2015 at 2:00 PM, Josh Grant <SPAN
dir=ltr><<A href="mailto:jgrant@accima.com"
target=_blank>jgrant@accima.com</A>></SPAN> wrote:<BR>
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<DIV>This is an estate planning type question.</DIV>
<DIV>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+.</DIV>
<DIV> </DIV>
<DIV>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.</DIV>
<DIV> </DIV>
<DIV>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.</DIV>
<DIV> </DIV>
<DIV>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.</DIV>
<DIV> </DIV>
<DIV>Anyone think a ante-nuptial agreement would be a substantial protection
for W against business debts, even if H is a sole shareholder?</DIV>
<DIV> </DIV>
<DIV>Josh Grant</DIV>
<DIV> </DIV>
<DIV style='FONT-SIZE: 12pt; FONT-FAMILY: "Calibri"; COLOR: rgb(0,0,0)'>Joshua
F. Grant, PS<BR>Attorney at Law<BR>P. O. Box 619<BR>Wilbur, WA 99185<BR>tel
509 647 5578<BR>fax <A href="tel:509%20647%202734" target=_blank
value="+15096472734">509 647 2734</A><BR></DIV>
<DIV> </DIV>
<DIV> </DIV></DIV></DIV></DIV><BR>_______________________________________________<BR>WSBAPT
mailing list<BR><A
href="mailto:WSBAPT@lists.wsbarppt.com">WSBAPT@lists.wsbarppt.com</A><BR><A
href="http://mailman.fsr.com/mailman/listinfo/wsbapt" rel=noreferrer
target=_blank>http://mailman.fsr.com/mailman/listinfo/wsbapt</A><BR></BLOCKQUOTE></DIV><BR><BR
clear=all><BR>-- <BR>
<DIV class=gmail_signature>
<DIV dir=ltr>
<DIV>
<DIV>Mark T. Higgins<BR>Mark T. Higgins, P.C.</DIV>
<DIV>P.O. Box 57<BR>Darrington, WA
98241<BR>206-491-2420</DIV></DIV></DIV></DIV></DIV>
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