Corporate Creation and Divorce

[smoolik]

What is the name of your state? California.

I just relocated my residence to my parents home yesterday. I have been planning my divorce for the past 3 years. I have made sure to protect myself by making absolutely no income for the past 3 years. However, in the midst of all this, 2 months ago, I began working with a new friend creating a new business. We have only outlined processes and concepts for the business, none of which are printed. All of the information is stored digitally on computers away from the home.

3 weeks ago, I began processing to form the corporate entity. I paid a CPA for processing and filing the corporation in Delaware, as we understand that this is the state that has the most favorable and understandable laws, from the aspect of venture capitalists. I stalled on actually signing the papers, so no entity has been formed. My wife has never asked if I had done this or not, but I would venture to say, that she assumes the corporation has been formed.

I understand that if I form a corporation and put in initial funds to symbolize my interest in such, that those funds are considered to be community property. Thus, I should wait until the divorce is final before forming the corporation. This is a problem as I have investors who are veraciously impelled and ready to inject their funds. We also understand that a waiting period is necessary from the time that the corporate entity is formed, and capital is raised. We know that this is for tax purposes and to avoid being assessed a tax on the shares being valued higher than our symbolic investment of such.

I don't want to lose my investors. Can I form the corporation with my name out of it and buy into it after the divorce is final? Will the speed of processing & finalizing a Nevada divorce, serve to help me in this situation? Will a 3rd party investing for me as a gift, for the symbolic investment on the creation of the entity, serve to help me. What are my choices here? Does the state where the corporation is created have a bearing on such?

Also, my wife and I purchased our home, using her mother's credit and thus the home went under her name. The idea was that once my daughter reached the age of 18, she would do a quick claim deed and transfer the property to our names. She placed the property in her trust with my wife as the sole beneficiary. I have been paying the mortgage and property taxes as well as the upkeep, with negligible if any, financial aid derived from my wife's efforts, as she chose to be a lazy ass, and not work within 1 year of our 10 year marriage. That's another story. So my daughter turned 18. My father-in-law passed away last year, and soon after that my mother-in-law became ill from cancer and passed away as well. So the property was never transfered to us, instead my wife received it as inheritance from her mothers living trust. Although my wife insists that she is going to give me my fair 1/2, I i know her well enough, after seeing her despicable anger and cunning virtues, that that promise is worth it's weight in manure. Do I have a leg to stand on? Although receiving my share of the home's equity would ease the financial strain, I am just happy to be out (before she killed me from her yelling and anger) and be in peace. If I have any leverage here, I would like to know if I can perhaps rock the boat a bit with it.

Back to the corporation. Since no corporate entity has been formed, can she attempt to ask the court to grant her intellectual property; in other words, the ideas in my mind? What are my best options? Do I have any? Is there any way to form the corporation, in order to not lose our window of opportunity in the realm of technology and waiting investors?

Oh and I should add that we have accumulated $175,000 in credit card debt. She also received a 50% stake in her mother's home which is worth about $670K. That home is on the market now. Regarding the funds from the sale of this home, is there a time when those funds become community property? If so, what are those circumstances?

Thank you in advance

[mistoffolees]

Originally Posted by smoolik

What is the name of your state? California.

I just relocated my residence to my parents home yesterday. I have been planning my divorce for the past 3 years. I have made sure to protect myself by making absolutely no income for the past 3 years. However, in the midst of all this, 2 months ago, I began working with a new friend creating a new business. We have only outlined processes and concepts for the business, none of which are printed. All of the information is stored digitally on computers away from the home.

3 weeks ago, I began processing to form the corporate entity. I paid a CPA for processing and filing the corporation in Delaware, as we understand that this is the state that has the most favorable and understandable laws, from the aspect of venture capitalists. I stalled on actually signing the papers, so no entity has been formed. My wife has never asked if I had done this or not, but I would venture to say, that she assumes the corporation has been formed.

I understand that if I form a corporation and put in initial funds to symbolize my interest in such, that those funds are considered to be community property. Thus, I should wait until the divorce is final before forming the corporation. This is a problem as I have investors who are veraciously impelled and ready to inject their funds. We also understand that a waiting period is necessary from the time that the corporate entity is formed, and capital is raised. We know that this is for tax purposes and to avoid being assessed a tax on the shares being valued higher than our symbolic investment of such.

I don't want to lose my investors. Can I form the corporation with my name out of it and buy into it after the divorce is final? Will the speed of processing & finalizing a Nevada divorce, serve to help me in this situation? Will a 3rd party investing for me as a gift, for the symbolic investment on the creation of the entity, serve to help me. What are my choices here? Does the state where the corporation is created have a bearing on such?

Also, my wife and I purchased our home, using her mother's credit and thus the home went under her name. The idea was that once my daughter reached the age of 18, she would do a quick claim deed and transfer the property to our names. She placed the property in her trust with my wife as the sole beneficiary. I have been paying the mortgage and property taxes as well as the upkeep, with negligible if any, financial aid derived from my wife's efforts, as she chose to be a lazy ass, and not work within 1 year of our 10 year marriage. That's another story. So my daughter turned 18. My father-in-law passed away last year, and soon after that my mother-in-law became ill from cancer and passed away as well. So the property was never transfered to us, instead my wife received it as inheritance from her mothers living trust. Although my wife insists that she is going to give me my fair 1/2, I i know her well enough, after seeing her despicable anger and cunning virtues, that that promise is worth it's weight in manure. Do I have a leg to stand on? Although receiving my share of the home's equity would ease the financial strain, I am just happy to be out (before she killed me from her yelling and anger) and be in peace. If I have any leverage here, I would like to know if I can perhaps rock the boat a bit with it.

Back to the corporation. Since no corporate entity has been formed, can she attempt to ask the court to grant her intellectual property; in other words, the ideas in my mind? What are my best options? Do I have any? Is there any way to form the corporation, in order to not lose our window of opportunity in the realm of technology and waiting investors?

Oh and I should add that we have accumulated $175,000 in credit card debt. She also received a 50% stake in her mother's home which is worth about $670K. That home is on the market now. Regarding the funds from the sale of this home, is there a time when those funds become community property? If so, what are those circumstances?

Thank you in advance

Regarding the corporation, you have several things to worry about. If you put your name on it and use any marital resources, it becomes marital property. If, OTOH, you don't put your name on it and set it all up and then put your name on it just after the divorce, you have to worry about contempt of court for defrauding the court (since you've just publicly stated your intent to cheat your stbx by assiduously not having any visible income for 3 years and your intent to hide your corporation.

The credit card debt is probably joint. The home is not. If your stbx is smart, she'll never mingle the proceeds of the home with your other assets and you can't touch it.

[smoolik]

? You state that I publicaly have revealed my intent to cheat, when in fact my identity on this forum is anonymous. So how am I supposed to interpret that? She walks away with enough to live on the interest alone for the rest of her life, and I get zip.

The other question is, if she places the funds in our joint savings or checking account, is the law clear on this? Does this make those funds community property?

Do I have any advantage by expediting this using a Nevada divorce?

[LdiJ]

Originally Posted by smoolik

? You state that I publicaly have revealed my intent to cheat, when in fact my identity on this forum is anonymous. So how am I supposed to interpret that? She walks away with enough to live on the interest alone for the rest of her life, and I get zip.

The other question is, if she places the funds in our joint savings or checking account, is the law clear on this? Does this make those funds community property?

Do I have any advantage by expediting this using a Nevada divorce?

If she is stupid enough to place the funds in your joint savings or checking account then yes, they would become marital property. However, the odds of that happening are slim to none.

The point that the other poster was making is that you have made it clear that you are no less "cunning" than you accuse your wife of being. Deliberately positioning yourself to have no income for the last three years is pretty danged malicious in intent.

[CJane]

Originally Posted by LdiJ

If she is stupid enough to place the funds in your joint savings or checking account then yes, they would become marital property. However, the odds of that happening are slim to none.

The point that the other poster was making is that you have made it clear that you are no less "cunning" than you accuse your wife of being. Deliberately positioning yourself to have no income for the last three years is pretty danged malicious in intent.

It's interesting as well that he's had no income for 3 years and yet claims that his wife is a lazy ass who won't work and that HE has been paying all of the bills. How does one pay all the bills (on $175K in CC debt alone!) w/no income?

I'm thinking the first step this OP should make is to a really really good attorney.

[mistoffolees]

Originally Posted by CJane

It's interesting as well that he's had no income for 3 years and yet claims that his wife is a lazy ass who won't work and that HE has been paying all of the bills. How does one pay all the bills (on $175K in CC debt alone!) w/no income?

I'm thinking the first step this OP should make is to a really really good attorney.

Actually, I'm sort of rooting for his stbx. I hope SHE has a good attorney.

[CourtClerk]

Originally Posted by mistoffolees

Actually, I'm sort of rooting for his stbx. I hope SHE has a good attorney.

Adding:

I hope she has a d*mn good attorney who has access to an equally d*mn good forensic accountant who will eat the OP alive.

I don't do people who cheat.

[SingleAZdad]

Honestly, it sounds like OP is less cunning than STBX and may need some help. If there is that much money floating around, get a good attorney.

I'm confused regarding the marital home. One poster mentioned that OP has no claim to the home, but it has been the marital home and marital funds have been used to pay the mortgage. Why wouldn't OP be entitled to 1/2 the equity?

[LdiJ]

Originally Posted by SingleAZdad

Honestly, it sounds like OP is less cunning than STBX and may need some help. If there is that much money floating around, get a good attorney.

I'm confused regarding the marital home. One poster mentioned that OP has no claim to the home, but it has been the marital home and marital funds have been used to pay the mortgage. Why wouldn't OP be entitled to 1/2 the equity?

Because neither one of them owned it. She inherited it and inheritances are separate property. It is also a very recent inheritance, so even if he could claim some appreciation since she became the owner, it wouldn't be much.