What is the name of your state (only U.S. law)? California
I am about to get married in CA.
I am also starting my own corporation in NV.
I want to make sure that in the event of a divorce, my business is maximally protected. I have not established the business yet (I'm an independent contractor), but it WILL be established BEFORE I marry & I’ll enter the marriage as a co. owner & director.
I want to establish a corporation for 1) for tax purposes and 2) I want to donate approximately 40% of the corporation's yearly gross income to my church as charitable donations. My future spouse is not a member of this or any church. He has verbally stated that he has NO problem with the magnitude of my donations as long as it doesnt interfere with our basic needs.
However, if he found out how much money the corporation will make & the magnitude of charitable donations, (not being a member of the church and making approximately 50% - 70% less income than the corporation will generate), he may become antagonistic and seek a divorce with an attempted claim on both present and previous donations. God forbid this occur, but if we were to divorce, I dont want him to have any claim on the business or previous charitable donations made by the business. (Obviously, I wouldnt marry him if I thought he would actually do this, but I want to do everything I can now to ensure that if the worst happens, my assets and interests are protected.)
I am contemplating setting up a corporation, whereby corporate expenses and charitable donations can be deducted without having to be declared to my future spouse. (He would see my personal tax returns but not those of the corporation).
I want to incorporate in Nevada (due to tax laws and its strong protection against piercing the corporate veil) whereby my father owns 95% of the corporation and I own 5%. I would be the director of the corporation and would earn a salary. My dad would receive 95% of profits and I would receive 5% in addition to my salary.
However, "Profits" would be minimal from the corporation because 95% of the gross income produced would be deducted in the form of: charitable donations, expenses/taxes and my salary.
Thus, any profits would be minimal amounts but would reinforce the ownership precentages of my dad as primary owner with 95% interest and me with a much smaller interest at 5%. (My dad is exceedingly honest & trustworthy, has his own monetary sources and is a member of my church so he would be 100% for this). Additionally, charitable donations made by the corp would be in both my dad's name & mine, thereby benefiting us both in further reinforcement of ownership status.
Questions:
1. I obviously want to keep my ownership share as small as possible in the event of a divorce. But, would this business model hold up in a divorce court? My dad would own 95% of the business, I would own 5% and we would be paid minimal profits accordingly. But, I would get the lion's share from my salary. Would this present a problem if my salary as director accounted for a greater percentage of the gross income than the charitable donations? Should my salary as a director be less than the charitable donations in order to legitimize the business form?
3. Could pre-meditated inclusions in the articles of incorporation regarding the corporation's purpose as a charitable donation entity ensure legitimacy? And if so, what would you recommend I include?
4. I know a pre-nup would be more simple, but I want to avoid this. I would be entering the marriage owning the business so technically, (even in community property states), I should leave the marriage with my business interest intact? Even if I just form the company after our engagement and a few months before the marriage?
5. I understand that buy-sell agreements are also useful in protecting business interests. If I establish a buy-sell agreement with my dad that in the event of a divorce on my part that says I can sell my shares of the corporation and maintain only my salary as a director/employee; will that protect my business?
6. Also, in this buy-sell agreement, could it state that if my dad gets remarried, new spouse has no claim on the business; would that protect the business from a future spouse in the event of a divorce or my father's death?
7. If I did this, I would only own 5% of the corporation. So, in a divorce, only MY personal bank accounts, assets and 5% of the corporations' worth, profits & assets would be subject to division by any divorce agreement. Is this correct?
I am about to get married in CA.
I am also starting my own corporation in NV.
I want to make sure that in the event of a divorce, my business is maximally protected. I have not established the business yet (I'm an independent contractor), but it WILL be established BEFORE I marry & I’ll enter the marriage as a co. owner & director.
I want to establish a corporation for 1) for tax purposes and 2) I want to donate approximately 40% of the corporation's yearly gross income to my church as charitable donations. My future spouse is not a member of this or any church. He has verbally stated that he has NO problem with the magnitude of my donations as long as it doesnt interfere with our basic needs.
However, if he found out how much money the corporation will make & the magnitude of charitable donations, (not being a member of the church and making approximately 50% - 70% less income than the corporation will generate), he may become antagonistic and seek a divorce with an attempted claim on both present and previous donations. God forbid this occur, but if we were to divorce, I dont want him to have any claim on the business or previous charitable donations made by the business. (Obviously, I wouldnt marry him if I thought he would actually do this, but I want to do everything I can now to ensure that if the worst happens, my assets and interests are protected.)
I am contemplating setting up a corporation, whereby corporate expenses and charitable donations can be deducted without having to be declared to my future spouse. (He would see my personal tax returns but not those of the corporation).
I want to incorporate in Nevada (due to tax laws and its strong protection against piercing the corporate veil) whereby my father owns 95% of the corporation and I own 5%. I would be the director of the corporation and would earn a salary. My dad would receive 95% of profits and I would receive 5% in addition to my salary.
However, "Profits" would be minimal from the corporation because 95% of the gross income produced would be deducted in the form of: charitable donations, expenses/taxes and my salary.
Thus, any profits would be minimal amounts but would reinforce the ownership precentages of my dad as primary owner with 95% interest and me with a much smaller interest at 5%. (My dad is exceedingly honest & trustworthy, has his own monetary sources and is a member of my church so he would be 100% for this). Additionally, charitable donations made by the corp would be in both my dad's name & mine, thereby benefiting us both in further reinforcement of ownership status.
Questions:
1. I obviously want to keep my ownership share as small as possible in the event of a divorce. But, would this business model hold up in a divorce court? My dad would own 95% of the business, I would own 5% and we would be paid minimal profits accordingly. But, I would get the lion's share from my salary. Would this present a problem if my salary as director accounted for a greater percentage of the gross income than the charitable donations? Should my salary as a director be less than the charitable donations in order to legitimize the business form?
3. Could pre-meditated inclusions in the articles of incorporation regarding the corporation's purpose as a charitable donation entity ensure legitimacy? And if so, what would you recommend I include?
4. I know a pre-nup would be more simple, but I want to avoid this. I would be entering the marriage owning the business so technically, (even in community property states), I should leave the marriage with my business interest intact? Even if I just form the company after our engagement and a few months before the marriage?
5. I understand that buy-sell agreements are also useful in protecting business interests. If I establish a buy-sell agreement with my dad that in the event of a divorce on my part that says I can sell my shares of the corporation and maintain only my salary as a director/employee; will that protect my business?
6. Also, in this buy-sell agreement, could it state that if my dad gets remarried, new spouse has no claim on the business; would that protect the business from a future spouse in the event of a divorce or my father's death?
7. If I did this, I would only own 5% of the corporation. So, in a divorce, only MY personal bank accounts, assets and 5% of the corporations' worth, profits & assets would be subject to division by any divorce agreement. Is this correct?
