Worcester Business Journal

wbjournal.com | July 28, 2025 | Worcester Business Journal 19 By Lynette Paczkowski Paczkowski is a family law attorney and partner at Worcester law firm Bowditch & Dewey. 10) Drafting a prenup is not divorce planning; it is an extension of estate planning. Without a prenup, the court may make decisions regarding your assets that are inconsistent with what your estate plan otherwise provides. 9) Prenups are not only for the wealthy. Many people assume they are only useful to protect family money or against a gold-digger. Regardless of your net worth, prenups may insulate you from your spouse's debt, reduce contested issues (aka future legal fees) in a divorce, and retain your ability to provide for children of a prior relationship. 8) A well-drafted prenup can consider different possibilities. Some prenups will include different provisions based on the length of the marriage, such as increased alimony the longer the marriage lasts or a sliding scale for dividing assets based on the difference between the parties' assets at the time of divorce. 7) Prenups may help reduce conflict and distrust during the marriage. Drafting and negotiating a prenup requires the parties to make full and complete financial disclosures. 6) Prenups cannot be used to determine child-related issues. These include topics relating to custody, parenting time, or child support. 5) Different jurisdictions treat prenups differently. It is important to consult with an attorney regarding which laws should be considered regarding drafting and enforcement. 4) Both parties need to be actively engaged in the process. That is, both partners should consult with their own attorney to ensure the agreement is fair and reasonable and both partners need to agree to its terms. 3) A prenup can help protect business interests. By defining what happens to the business in the event of divorce, you can avoid disruptions to business operations. 2) In most cases, prenups are not cost-prohibitive. Most can be prepared at a reasonable cost when compared to the potential cost of litigation. 1) A prenup helps the parties maintain predictability and control. Any time you put a decision in the hands of a third-party (e.g., the court), you lose control of the outcome. Mass. tax ruling creates new risk for founders who move out of state BY SLOANE M. PERRON Special to WBJ R elocating for a promotion or new job opportunity can be both ex- citing and challenging. Uprooting your life to pursue managerial career goals in a new state or country requires careful planning and adaptability. Lead- ing a new team in an unfamiliar envi- ronment presents a valuable opportunity for growth and learning. Explore your new community. Before diving into your new role, it's important to feel comfortable in the place you'll be calling home. Getting personally adjusted to your new surroundings can make the professional transition much smoother. If possible, visit the area be- forehand to explore the neighborhood. If an advance visit isn't feasible, stay Maintaining leadership confidence in a new environment Matthew Erskine is managing partner for Worcester law firm Erskine & Erskine. BY MATTHEW ERSKINE Special to WBJ T he Massachusetts Appeals Court ruling in Welch v. Commissioner of Reve- nue has sent shockwaves through the entrepreneurial community, potentially changing how founders think about their exit strategies. is landmark case creates significant tax implications for business founders who build companies in Massachusetts and later relocate to another state before selling their shares. Craig Welch, a founder of Acadi- aSo, moved from Massachusetts to New Hampshire before selling his shares in the company. Despite being a non-resident at the time of the sale, the court upheld that Welch was liable for Massachusetts income tax on the capital gains from selling his stock, determin- ing that the gain was derived from or effectively connected with his previous employment and business activities in Massachusetts. e court's decision hinged on interpreting Welch's stock not as a passive investment but rather as a form of deferred compensation or reward for services performed in Massachusetts. e government emphasized Welch's deep involvement in building Acadia- So, his expectation of a future payout for his sweat equity, and contractual provisions tying stock ownership to continued employment. is decision represents a significant departure from how most states treat the sale of corporate stock by former residents. For founders and executives, particularly those in Massachusetts' vibrant tech and biotech sectors, this ruling creates a complex new tax plan- ning challenge. Moving to a lower-tax state, a common strategy for entrepre- neurs approaching a liquidity event, may no longer provide the expected tax benefits if Massachusetts can claim the stock gains are effectively connected to previous work performed in the state. e ruling signals a significant shi in how states may attempt to tax income with substantial ties to their jurisdic- tion, even aer the taxpayer has le the state. is is especially relevant as more high-net-worth individuals and business owners consider changing resi- dency to avoid state income taxes. e case is being closely watched as it may influence tax policy and enforce- ment in other states, particularly those with significant numbers of company founders and executives. Critics argue the decision blurs the line between a founder's investment and compensation and fails to fully respect the Department of Revenue's own regu- lation, which generally excludes capital gains from stock sales from Massachu- setts source income unless directly tied to compensation for services. ere is growing concern this prec- edent could deter entrepreneurs and executives from founding or building companies in Massachusetts, knowing the state may seek to tax future stock sale proceeds even aer they relocate. Venture capital and private equity firms with Massachusetts portfolio companies should consider several strategies to protect founders from sim- ilar tax outcomes, including structuring equity differently, reviewing operating agreements and employment contracts, and considering alternative corporate structures. 10 THINGS I know about ... ... Prenups informed by following local news and blogs to gain insight into the communi- ty, recommends Jacquelyn Smith in an article for Forbes. Earn the trust of your new team. In your previous role, you were well-es- tablished and familiar with your team. Now, as the new person on the scene, it's your responsibility to rebuild those relationships with a new group of colleagues. It can be humbling to shi from leader to learner as you adjust to a different environment. By intentionally investing time in your new team and showing genuine interest in who they are, you begin laying the groundwork for the trust essential to your collective success. "To do this, dedicate part of your first week to getting to know your direct reports by scheduling one-on- ones with each of them or taking them to lunch," advises Brian O'Connell in an article for the Society for Human Resource Management. Appreciate the cultural diversity of your team. Whether you've relocated to a new town, state, or country, every place has its own unique culture. ese differences become even more pro- nounced when working internationally. As a manager, it's essential to take the time to understand the local customs, traditions, and workplace norms of your new environment. Doing so will greatly influence how effectively you lead your team. "Seeking commonality is import- ant to a global work orientation because it draws colleagues from diverse cultures closer, which in turn translates to more effective collaboration and teamwork," explains Tsedal Neeley in the Harvard Business Review. W W W

• Cover