Recent studies have shown that only 26% of American women do not work. Furthermore, in 4 out of every 10 American households, the mother is the sole or primary earner for the family. Women in Arizona are no exception. Arizona is ranked 6th out of the top ten states for women-owned businesses. Because the number of women moving from the home to the workplace is ever increasing, it is important for businesswomen to know how to adapt to these changes. Three attorneys from Jennings & Strouss, a Valley-based law firm, answer some of our questions regarding what businesswomen should be aware of today.
What advice would you give a businesswoman regarding prenups?
Norma Milner Izzo
Family Law Attorney
Prenuptial agreements can be quite romantic, actually. There is no better time to outline the financial responsibilities of each spouse, in the event of a divorce, than when both people admire and love each other the most. It allows spouses the opportunity to avoid public, in-court battles and resolve the financial aspect of a legal separation or dissolution of marriage within the confines of a conference room. A properly drafted prenuptial agreement allows spouses to determine how assets acquired prior to and during the marriage would be divided. It can also be used to shield a spouse from the other spouse’s debt. Prenuptial agreements can also outline the terms of any spousal maintenance or alimony obligations.
While an excellent way to protect your assets, a prenuptial agreement cannot deal with issues related to child custody, parenting time or child support. Certainly all provisions within the agreement must be legal and conscionable. I always suggest to my clients that both spouses have legal representation and that the drafting and execution of the agreement not occur immediately before the ceremony. While the timing alone wouldn’t invalidate an otherwise valid prenuptial agreement, I find that people have a better experience if they can discuss the terms of the agreement without feeling undue pressure to complete it mere days before the wedding.
It is important for potential clients to realize that engaging with counsel for a prenuptial agreement is a full legal representation, not simply a document preparation. With that said, anyone considering entering into such a contract should meet and confer with a skilled attorney that practices family law and is familiar with the state’s laws regarding prenuptial agreements. The attorney should ensure the client’s full cooperation and participation in full disclosure related to each person’s assets so that both spouses are making informed and deliberate decisions.
What are some of the necessary legal steps that Valley businesswomen should take in order to protect both their families and their job?
Estate Planning and Probate Law Attorney
If a woman owns her own business, she should hold her business assets through a limited liability entity, such as a limited liability company. A limited liability company can protect personal assets from the creditors of her business. Additionally, a limited liability company is a “pass through” entity for tax purposes, so that conducting a business through a limited liability company does not result in additional taxes at the company level. Rather, each owner of a limited liability company is taxed on his or her share of the income from the business.
Valley businesswomen can also protect assets through trusts. Historically, trusts created in certain foreign jurisdictions could provide significant asset protection for the creators of those trusts. Now, some states allow persons to create trusts for their benefit that can serve to significantly protect assets during their lifetime, with a much lower administration cost than a foreign jurisdiction.
Additionally, a revocable, standard family trust that is created during lifetime can serve to protect assets following death. For women with children, leaving assets to children through a trust can be beneficial in that the assets can be distributed to children over time rather than in one lump sum at an age when the child may not be ready to manage the assets. Also, by keeping the assets in a trust for the child’s benefit, the assets can generally be protected from the child’s creditors in the event of divorce or financial difficulties. A trust can also be beneficial in protecting assets in that it can provide a way for a woman to provide for her surviving spouse by giving him a lifetime income interest in the trust but make sure that the assets ultimately go to her children. For ultra high net worth women, trusts can also be a vehicle for techniques to minimize estate taxes.
What advice would you give a businesswoman regarding hiring and firing?
Labor and Employment Law Attorney
Laws affecting business owners are changing at lightning speed. Over the last few years, there have been major changes to federal and state laws related to healthcare, immigration, employment discrimination and controlled substances. For example, the Affordable Care Act is changing employee benefits in ways that may affect your business’s bottom line. Are you prepared? Or, can you fire someone for being under the influence at work if they have a prescription for medical marijuana? Arizona business owners need to understand their rights and responsibilities.
The informed business owner can better navigate these complex issues by staying up-to-date on changes in the law. I also suggest business owners regularly review and revise their employee handbooks as well as their policies and procedures to comply with the laws as they evolve. These policies and procedures not only protect the business owner but also state the employee’s responsibilities and sets expectations, protecting the entire team from any employment discrepancies that may arise.
About Jennings, Strouss & Salmon
Jennings Strouss & Salmon is one of the Southwest’s leading law firms, providing business, litigation and regulatory legal counsel for over 70 years through its offices in Phoenix and Peoria, and Yuma, Arizona; and Washington, D.C.