Prenuptial Agreement to protect innocent business partner


#1

Can a Catholic sign a prenuptial agreement that protects an innocent third-party business partner in case of divorce? This assumes that the agreement only protects assets to the extent that they fairly belong to the innocent party, not the husband/wife.

Pro: it saves the innocent 3rd-party business partner’s assets from an adverse divorce distribution. Con: it contemplates divorce.

Does the Church force business owners to assume the risk if their partner wants to get married in the Church?

Thanks for your replies - if you have any links to something authoritative, a double thanks!

(The only information I could find was forums.catholic.com/showpost.php?p=8794760&postcount=5, which is not very authoritative).


#2

Firstly, this should really be a matter of establishing the correct form of business. If you have set the business up correctly, the wife would only be entitled to receive up-to 100% of the husband’s shares, not any shares of the other partner(s)-- which would be true if the partner-spouse died, not just in the event of divorce.

Secondly, any prenuptial agreement must be presented to, and evaluated by, the diocesan tribunal They make a determination as to whether it creates an impediment to valid marriage.

Which is why it would likely be disallowed. Again, the parties to the business should talk to their lawyer. If the partner feels threatened by the marriage, perhaps he is in the wrong partnership and should get out and be on his own.

I think this is really out of line. The partner has assumed risk just by having a partner. If he doesn’t like risk he probably shouldn’t be in business. But he could consider moving the partnership to an LLC or a corporation.


#3

So, essentially, you’re denying the innocence of a third-party partner? You would morally require them to be abreast of all current laws that could bankrupt them and have the ability and finances to follow through with the laws regarding liability of assets, and if they fail in either of these two respects, they are not an innocent party at all, and thus there is no need to contemplate their protection in a prenup (since they are morally at fault)?


#4

I don’t think it is a matter of innocent or not innocent. It is a matter of choosing the correct form of business. A partnership may not be the right form of business for that particular person and situation.

Where is all that coming from?

You do realize, I would hope, that as a partner in a business you need to be “abreast” of your liabilities and assets, and the law, even if your partner does not have a spouse.

Again you are trying to frame it as “innocent” versus not innocent-- whatever that means-- and I am telling you it is not about innocence, it is about establishing the correct form of business.


#5

If someone is so bad in business that he needs to push for a pre-nuptial from his business partner and his future wife then he should stay out of this kind of partnerships. Lawyers do exists for a reason, to help people that do not have full knowledge of the law. There is no innocence in forcing someone else to sign a pre-nuptial agreement, I would say that the whole concept is quite immoral.


#6

This sounds more like a person who is angry at something and/or looking to stir up trouble here, than it does someone seeking an understanding of anything Catholic. Is there a less confrontational question here?


#7

[quote="Cristiano, post:5, topic:301525"]
If someone is so bad in business that he needs to push for a pre-nuptial from his business partner and his future wife then he should stay out of this kind of partnerships. Lawyers do exists for a reason, to help people that do not have full knowledge of the law. There is no innocence in forcing someone else to sign a pre-nuptial agreement, I would say that the whole concept is quite immoral.

[/quote]

Your first statement predicates a moral norm based on having a certain degree of intelligence - morality doesn't work that way. Your second statement predicates a moral norm based on having finances (access to a lawyer) - morality doesn't work this way. Though prudence might dictate either course in most (not all) circumstances.

The putative husband (or wife) is essentially saying "Dear, I love you unconditionally but I owe a duty of loyalty also to my business partner. If you can't sign this agreement protecting him alone, then I can't marry you out of concern for him." Is this immoral because he would then simply be morally obligated to quit his business partnership? This might even assume that the putative wife didn't want him to quit and had no problems signing.

Also, what about the priest in my link above (again - forums.catholic.com/showpost.php?p=8794760&postcount=5) who apparently approved this exact arrangement? On what grounds did he approve the agreement?


#8

what about it? we have no details from which to draw any conclusions.

What we can say is what i have already said: any prenuptial agreement must be reviewed by the tribunal and a decision rendered before the marriage can go forward.


#9

If the person in question has a lawyer who can draw up a pre-nuptial, than that person can instead have the lawyer draw up the correct business partnership agreements.

In any case, in the contract will be contested, a prenup doesn’t have any more chnace of getting through court than the correct business agreements do.

If there is this much concern, it is worth using proceeds from the business in order to hire a lawyer to help with the partnership paperwork. If neither partner in the business is willing to do that, perhaps there isn’t enough trust or agreement between them to keep the partnership going.

The Catholic member of this threesome, whoever it is, should call the tribunal for advice.


#10

I don’t know all the fine details, but at my husband’s law firm all the partners are required to have pre-nups as a condition of their partnership. If a potential partner is already married, they are required to execute a post-nup. When my husband became a partner we were already married, so I took a copy of the proposed post-nup to another attorney (unrelated to my husband’s firm) to look over for my benefit. According to her, it was pretty standard stuff. It never would have occurred to me to submit it to a church tribunal.

Interestingly, a few years ago one of the partners became engaged to be married. As it happened, his fiancee balked at signing a pre-nup, and the partner announced his intention to get married anyway. When the rest of the partners threatened to sue him it got ugly, and he ended up leaving the firm. When she determined that his income had taken a huge dive, the fiancee decided that he wasn’t marriage material anymore. I think he dodged a bullet.


#11

Why do you need a pre-nup for that? The articles of the business should clearly dileniate the assets that belong to each partner. They can also include clauses perhaps that no one else is allowed to possess the business without the consent of all the partners. Which means the wife cannot get the business in the event of a divorce, although she can surely sue for equal compensation in another form (monetary or assets).


#12

You were already married. There was nothing to submit to the tribunal.


#13

Yeah, as I think about it, you’re right.


#14

#15

Well, not a lawyer myself but come from a family of them and the partner’s share of the business is not subject to to inclusion in the marital assets, as far as I know. So the prenup for that reason is unnecessary. To protect each other, the partners need to make a clear contract that states just what part of the business each owns.


#16

:popcorn: wow this is an interesting thread.


#17

Not necessarily true. The putative husband (or wife) cannot force his business partner to change the structure of the business association.

This is an incorrect statement of the law . A prenup has a presumption of being a legally binding document. It is enforceable in court. A business partnership can be established without any legal documentation whatsoever.

A prenup cannot undo an already existing agreement between business partners, no matter who is paying the bill.

My question in the original post was “can” not “should”. This advice is always good, of course, but by its nature it insinuates there are some circumstances that you could protect an innocent 3rd-party with a prenup (else, why would you call). I want to know if it is possible under any circumstance to protect an innocent 3rd-party business partner. For example, if I’m a Catholic lawyer and a client approaches me on this issue, if I know there is a blanket prohibition, I can save the client time and energy. And as an amateur theologian, I’m also curious.


#18

The only cases that I know of that have had prenuptial agreements approved involved the disposition of assets to heirs (for example in widow/widower marriages where there are children of the first marriage) upon death. Not divorce.

Death, not divorce. But that can also be handled through estate planning.

Make an appointment to talk to the Judicial Vicar in your diocese, and he can explain the revelant Church law to you.


#19

I’ve gotta agree with 1ke above me - the only permitable prenups are ones that aren’t about divorce.

The issue isn’t isn’t who the prenup is designed to benefit, the issue is that a couple is entering a marriage with while admitting and planning for the possibility of divorce. That’s going to draw the validity of the marriage into question.

On a pragmatic note, no one should mix their business finances with their personal finances. There are ways to separate the two through incorporation and other means. If the business partner has been told about these options and refuses to have recourse to them, that’s his own fault.


#20

Another interesting tidbit I should have put in my original post is that moral law and church law may be different on the point. Not all things that are moral are permitted by church law.


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