PrenupsPosted: October 18, 2011
I’ve worked with a few clients who wanted prenuptial agreements executed before marrying. Some think those agreements smell of mistrust and suspicion. Sometimes, that’s true. Sometimes, it’s not.
The few I’ve done related to business ownership. Wilma owns a business with other family members and wants to marry Fred. They don’t execute a prenup. On the honeymoon, The Bus hits Wilma. (The Bus is looking for all of us–just so you know.)
If Wilma and Fred don’t have a prenup limiting Fred’s rights to ownership of the business, and if the business doesn’t have a Shareholder Agreement granting a right-of-first refusal to the company or remaining shareholders allowing it or them to purchase Wilma’s shares upon her death, the other shareholders may be stuck owning a business with Fred (who gets his dead new wife’s shares)–a guy they may or may not really like or know.
A key to a prenup is full disclosure of your balance sheet. Without said disclosure, a judge might rule that the prenup is unenforcable. So just remember that each party should have separate legal counsel, fully disclosure her or his balance sheet, and not coerce the other party to execute the prenup.
Now, some folks in Wisconsin see this a little differently. They’re considering legislation that would make prenups ironclad–even if coercion or incomplete disclosure occurs. Read here if you wish …
This guy’s probably from Wisconsin: