I came across this NY times column, which gave rise to all sorts of thoughts.
“My husband is beginning to fund-raise for his new start-up. I’m a professional brand strategist. He and his co-founder want my help naming their company, crafting messaging and creating their website and pitch materials. When I asked how formal the arrangement would be and whether there would be any compensation involved, he was incredibly hurt and now believes I don’t support his business. Am I completely wrong here? Should I work for him for free on the principle of being his wife?“
So let’s try to break this one down.
Many people would have a knee-jerk reaction and say, “OF COURSE spouses should share skills. Marriage is all about mutual contribution, and everyone’s the gainer. It’s called supporting each other.”
True enough. But there’s also this: if the wife is a professional and if she does any work of serious extent for her husband’s business, she almost inevitably passes over other (paid) opportunities.
Her contribution could range from a short-term consultancy to actually laying aside her own business entirely and supporting her husband’s startup. And here, if she gets no official recognition, position, or salary, is the fly in the ointment.
If the marriage stays stable, equitable and loving for the rest of these two people’s lives, that’s fine. No problem may ever arise and it may not matter in whose name the income is. But what if it’s not?
What if things go south, and 20 years down the road, the wife needs to strike out on her own after being a prop for her husband’s business for two decades? Yes, as many will point out, in case of a divorce, she gets a share of the business. He may buy out her part during property division, or he may sell the business and split the profit with her.
This, however, leads to two issues:
- In a family court, depending on the state in question, the wife may need to prove the extent of her contribution to the business, and this may be difficult if she never had an official role.
- If the husband is in sole control of company finances, he may prepare for divorce and siphon off funds to offshore funds and trusts (I’m aware of these strategies because I write a lot of web content for divorce lawyers).
Furthermore, if her role in the business was completely behind the scenes, the wife may have a 20-year blank on her resume. She may include her experience in the family business, of course, but then what happens if she applies for another position? Who will give her recommendations, the ex-husband/boss?
This gets even more problematic if she ever needs a mortgage or a car loan. Not (officially) working for 20 years doesn’t present a good picture for potential lenders.
If the split-up happens closer to retirement age, the wife may find herself in even deeper financial trenches.
But this isn’t even the worse scenario. In the worst case, the wife may actually stay stuck in an unhealthy, possibly abusive, marriage because she is so deeply mired financially. I’m not saying this will definitely happen. But it might.
So, my bottom line: if a person expects their spouse to play any long-term significant part in their business, at minimum, the contributing spouse should get an official recognition of their role and company stocks. Anything else may put their partner in a very, very precarious position down the road.