Worth sharing with The First Year readers: Recently an AllBusiness.com reader submitted this question, to which I was asked to respond:
I am looking for information on transferring ownership of our business from my husband to myself and want to know the correct process to have this done as soon as possible.
My email answer was:
I am not an attorney, but I can tell you that husband-wife property ownership matters are defined by state laws, so where you live will influence what you will need to do. For legal matters I generally recommend a person contact an attorney. While there will be fees for an attorne’y’s advice, doing it in incorrectly could cost you even more in the long run. If you do contact an attorney, make sure you explain what you want to accomplish by the transfer so that estate planning or other considerations are taken into account.
I then went on to offer several low-cost legal opinion options (Nolo Press, local Legal Aid Society). The reader replied promptly saying:
I think it is more like gifting it or something we are just looking to transfer the business out of my spouses name and into mine, no money will be involved it is strictly changing the name of the owner but no money or products are involved. We are a <type of service business> so there is no inventory, our address will remain the same nothing will change with the business other than the owners name..and we are in <state> so I am not sure if this is an easy thing to do or not.
And I responded:
I would still seek a legal opinion if I were you. Giving something of value to a person may have tax consequences. I don’t know the answer, but I believe you will be better off understanding the ramifications.
I really believe you should not try to avoid paying for legal advice. The costs of not understanding legal implications can be a great deal higher than fees for legal counsel, and you learn important stuff in the process. Think of it as insurance, with an education thrown in.