The family business is often the family's major asset, and frequently, it is a C corporation. But even if it is a public corporation, you must protectively title these corporate shares. If these shares are owned by you individually, they can be seized by your creditors. You should instead title these shares to a family limited partnership (FLP) . For example, a husband and wife (or either spouse) as the general partners would control the partnership. In turn, the LP owns and controls the stock interest in the corporation. Or you may title the corporate shares to an irrevocable trust. Your children, for instance, can be the beneficiaries. The husband and wife as co-trustees of the trust can then manage the trust that controls the corporation. In either instance, the spouses would indirectly control the corporate assets without directly owning the corporate shares. Another option is to title the shares to an international trust. It well-protects corporate shares. Or you may title your shares with your spouse as tenants-by-the-entirety if your state protects TBE shares against one spouse's creditors. Obviously, you can also pledge or encumber your shares to a friendly creditor as you can any other asset.
Many people do not think about protecting their stock ownership in their own business – and frequently this is both their major asset and a C corporation. If their shareholder interest in their own business is exposed, it's poor business and personal planning.
