If you’re looking to start or buy a business or engage in some other transaction with a family member, especially a spouse, it is wise to bring an attorney into that conversation early on. In many cases, such as dealing with an adoption or doing an estate plan, both individuals’ interests are aligned. In the case of starting a business together, however, they may not be.
One of the first steps when hiring an attorney to represent a couple is to confirm whether the client is the couple, one individual, or the business the couple is starting. If the client is one individual within the couple, is the other making their own decisions or getting advice from another lawyer? Can the lawyer advise both individuals? In the case of a business as the client, the attorney will then be responsible for advising towards the business’ best interest, even when that is different from the owners. That means, at the outset, having some difficult discussions about what will happen to the business down the road.
New businesses are a great example of having a couple as a client because, at the beginning, the new business owning couple is super-excited about the prospects and just knows everything will work out great. The job of the attorney is to help make sure that this is the case, but also to help the couple properly prepare for less-than-ideal outcomes. The attorney will take the couple through scenarios where one spouse has to withdraw from the business (often due to unavoidable life changes) and scenarios where there’s a disagreement between spouses on the best way to proceed. Addressing these issues at the beginning of the business is similar to creating a business plan. It gives a blueprint for how to proceed in the future as the business grows.
Once you had your initial meeting with the attorney and discussed both the issue you face and who the client is, you’ll sign a retainer agreement. This document should clearly state who the client is (either the couple, one individual, or the business itself) and what matter or matters the attorney is handling. This document makes it clear to both you and the attorney whose interests they are protecting and will also handle other administrative details of the lawyer’s representation. This includes important details such as when, and how much, the attorney expects to be paid for his services.
If the attorney is only representing one party in the transaction, they may need to get a release to allow the attorney to communicate with the spouse. Without the informed consent of the person who is actually the client, the attorney may be barred from discussing the matter with their spouse, even in situations where the spouse is the one paying for the attorney’s time.
Handling legal issues is something couples often do together. Whether you’re starting an exciting new venture together or sitting down for the first time to plan your estate, the attorneys at Virtus Law Firm have the expertise to help you. Give us a call at 612.888.1000 or contact us by email at firstname.lastname@example.org. We will do everything we can to take care of you, your spouse, and your family or business.