to want my husband to be a director in family business

[huehuetenango]

My husband's dear father died last year. He had a farm/estate and left it to my husband. MIL and FIL were directors of the farm, and wanted DH to become a director. He always tried to get out of this because he was more interested in his own career. He did want to inherit though, and wanted his father to feel that the farm would be valued by him.

Anyway, a few months before FIL died, DH agreed to become a director, but unknown to me postponed it, and so he still isn't signed up.


Now MIL is the only director. Does this mean that DH has no legal control over financial outgoings, even if the farm is in the process of becoming legally his?

MIL's son from her first marriage is an experienced businessman and is very kindly helping her. But shouldn't DH as the heir be more involved? Are there legal implications?

[CajaDeLaMemoria]

I don't understand.

If Mil is the only director, it's her company. DH has no control, no say. If it's left solely to him in your Mil's will, he'll inherit it in whatever state it is in when she dies.

[CajaDeLaMemoria]

It's not in the process of becoming legally his if he has postponed it. It is your MILs.

[NotYouNaanBread]

If your FIL legally willed it to your DH, then it belongs to your DH. He has the right to appoint (or remove!) directors and does not have to be a director to do this. He also has the right to take charge of spending. Being a director is not the same as ownership, unless it also involves a shareholding.

What I don't understand is the vagueness about ownership. If your FIL willed it (entirely?) to your DH last year, why are you still in doubt about the legal situation at least six months later?

[huehuetenango]

Well I know that it was willed to DH. It's taking a while to do all the legal stuff as there are complex trusts involved with the estate. But the farm is my husband's.
What I'm unsure about is how much control he has if he isn't a director.

[huehuetenango]

I should say the farm isn't in a trust - the trust bit of his will relates to other areas of his estate.

[Val007]

Please, speak to an accountant! Now!

[huehuetenango]

I would like my husband to take a salary from the farm. Money is really tight for us and I get my shoes and clothes mended rather than buying new things. We manage to give our 2 year old what she needs but I would love to struggle less.

DH doesn't want to take money from the farm as he says there are debts, but MIL seems to have loads of cash (ie great clothes, new £25k kitchen recently etc. ) I know she takes a director's salary.

I don't begrudge her enjoying her life and cash at all - she deserves to live a comfortable life. But I'd just love it if we could have a little more.

MIL wouldn't begrudge it either; the problem is with my husband. I think he still sees it as his parents' business and money and doesn't feel entitled to take anything, which is all very idealistic in principle, but a bit annoying when we can't afford an occasional meal out or some new clothes.

[MrsSparkles]

I would second speaking to a lawyer/accountant about the situation.

Your DH is the owner of the company, and can appoint who he wishes to run it - the directors. And/or he can be a director himself.

But depending on the type of company he may find himself personally liable for debts etc. He really should understand the financial situation of the farm and how much money is available to take out.

As MIL doesn't own it she is just taking a salary and (I in no way mean this badly)doesn't have as much invested as your DH has.

I speak from personal experience as a recently joined partner in a family business (and an accountant).

[BirdIsland]

Did FIL leave your DH the actual farm or shares in the company? The company that MIL is director of is a legal entity in its own right which may or may not own the farm land.

If the farm land was owned by FIL personally you need to find out the connection between the farm and the company - the lawyers dealing with FILs estate will be able to tell you this.

[huehuetenango]

Ok, that's an interesting point of view. I will ask to attend a meeting with the accountant. I feel that I'm in the dark about it all.

The waters are further muddied because when dd was born, DH's parents offered him a small salary to help out with family expenses but he declined it as he didn't want to get sucked into the family business before he was ready. So I don't know how much of his reluctance now to take money is because of genuine money worries or because of his old habit of keeping the family business at arms-length.

I feel a bit awkward abut raising it as I don't want to seem like a gold-digger. But my income took a big hit when I became a mum so I feel I need to ask for more money

[toomuchtoask]

I have no idea about the legal stuff but would it be morally right for your husband to take a wage as it sounds like he's doing none if the work? I am strugglingto understand if he owns it though as that changes things.

[huehuetenango]

My last reply was to mars sparkles.
Bird island I don't know the answers to these questions, and didn't even know about these possibilities. Thank you for alerting me to the questions I should be asking.
I really know very little about land management and legal issues, so this is incredibly helpful. Any more advice will be gratefully received.

[huehuetenango]

Toomuchtoask, yes, I think that's his stance, that he shouldn't get money for nothing. Yes, he does own it.

[flowery]

If you want advice rather than opinions you may want to ask for this to be moved to Legal where some very knowledgeable and helpful people hang out.

[huehuetenango]

Actually he does do a fair bit of office work at the farm anyway, but as he sees it he's just helping his mum rather than working per se.

It's nice that he's moral about not taking money but I feel that he is stuck in the role of dutiful son rather than husband and father. I feel awkward about asking for more money from him. But the reason I'm quite poor now is because of becoming a mother to his child.

[janey68]

Cannot agree more about seeking professional advice. I know a number of people- usually wives becoming a director in their husbands business - who do this to gain financial advantage; usually they aren't actually doing a real job in the business at all, but they do it to reduce the tax bill. All goes swimmingly until they realise they are liable for the debts...

[huehuetenango]

Janey - yes, that is food for thought.

On flowery's advice I'd like this thread to move to the legal board please.

[BoundandRebound]

I'd want a full set of accounts, he may well inherit a shed load of debt and you'll be worse off rather than better. Perhaps MIL new kitchen came from remortgaging rather than profit

You really need to look at this properly with the proper advice

[HollyBerryBush]

DH doesn't want to take money from the farm as he says there are debts, but MIL seems to have loads of cash (ie great clothes, new £25k kitchen recently etc. ) I know she takes a director's salary.

Make sure you get better advice - if he becomes a director, he will be liable for past debts.

[OliviaMMumsnet]

hi there OP
Do you think perhaps this might be better in Employment issues or legal or even relationships? Let us know here and we can move it for you

[Ilovemyself]

If he as the owner of the farm was liable for any debts it would not be unreas

[huehuetenango]

Thank you - could you move it to Legal please?
Thanks for the comments everyone.

[Ilovemyself]

Oops. Fat fingers. If her, as owner of the farm, is liable for any debts then it would not be unreasonable or immoral to take a wage in any way.

Legal advice is a must. If mother in law is running up huge debts ( not saying she is, but it is a possibility) she may end up costing you a large sum of money.

[FasterStronger]

huehue - I have some relevant personal experience.

(1) has your DH got a copy of the will. I think you need to understand exactly what was left to him. if not, you can get a copy of the will using information here: www.justice.gov.uk/courts/probate/copies-of-grants-wills

(2) is the company a limited company? if so, you can get a copy of the accounts and other documentation for a few pounds wck2.companieshouse.gov.uk//wcframe?name=accessCompanyInfo

I agree with everyone who says you need advice.

[huehuetenango]

Really useful again - thank you!