Legal Question in Business Law in Wisconsin

LEGAL FORMATION OF A WISCONSIN MEDICAL PRACTICE.....My husband and I are moving from the west coast and purchasing a medical practice in Wisconsin from a physician that is retiring. My husband is a physician. I will be managing, marketing and building the practice (I have an MBA) as well as paying for the practice purchase from estate money that I received before and after we were married. We both agree that this is a family business and had both intended on setting up a company (LLC actually) as equal partners. However, an attorney in Wisconsin has told us that only the physician (or physicians, if more than one) can be considered by Wisconsin law as a shareholder(s) in a �professional LLC� (i.e. law practices, medical practices, dental practices, etc.) How do I protect my equity interest in the company (the practice) if for example (god forbid), my husband decides to divorce me in 15 years? We both agree that this venture is a 50/50 thing. Surely there is some sort of corporate entity that we could use to encapsulate the medical practice where we would be equal shareholders. Or, possibly place the practice into a family trust? Incorporate outside of the state of Wisconsin? Or is the only thing we can do is have a written (marital) agreement between myself and my spouse, outside the realm of the practice corporate documents? Any advice is certainly appreciated.


Asked on 8/21/09, 1:54 pm

1 Answer from Attorneys
Thomas Schober Schober Schober & Mitchell, S.C.

Most of your suggestions will not work, since for your husband to practice medicine in Wisconsin, he must comply with our statutes regarding entity and ownership. However, the two of you could have a Wisconsin Marital Property Agreement that would spring into effect as soon as you bring yourselves to Wisconsin. This is not a "pre or post nuptial" agreement that you may think it is. It just classifies property as to who owns it. You could say that it is "survivorship marital property," meaning it will all go to the survivor, upon death of the first to die. The marital property designation would prohibit him from disposing of the asset without getting value for it. If he dies, you can own an interest in a professional entity for a short time to be able to dispose of it to another licensed person. That is usually arranged for during lifetime via a buy/sell agreement, so if your husband dies, you get the value of the practice, not the practice itself. As you can see, this can become a bit complex. I thank you for your question and wish you good luck in your relocation.

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Answered on 8/26/09, 2:47 pm


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