Getting divorced is never easy, but if you’re a business owner too and are looking to protect your livelihood during the divorce process, things can get particularly stressful.
I have helped many business owners through their divorces over the years. They have all benefited from seeking legal advice to clarify their position and plan the best way to move forward to ensure the business is protected as far as possible.
Here are some things you may wish to consider if you are heading for a divorce.
Consult with Experts Early
You should seek advice from a divorce lawyer as soon as you have taken the decision to divorce. Your accountant and financial advisor will also pay a key part in the process. Seeking advice early will ensure you are aware of what is involved in the divorce process, what you will need to do, identify any possible risks to your business and offer advice on how best to guard against those risks.
Consider the Value of Your Business
Whether you are a sole trader or your business is owned as a partnership or a limited company, it is likely that the value (whether in terms of capital or as an income producing asset) will be taken into account by the Court.
Whilst it is possible for the Court to order a business to be sold, that is most unusual. It is much more likely that the Court will order the non-business owning spouse to have more of the property or cash owned outside of the business and/or order maintenance to be paid than to “kill the goose that lays the golden egg”.
Keep a Cool Head
Unfortunately, by their very nature, divorces can be emotionally taxing; particularly so when you reach the part of negotiating a financial settlement. This can cause arguments and bring out a hard edge to your spouse’s personality but it is important you keep a cool head and keep sight of the end goal. Channel any frustrations into resolving matters promptly, allowing you to work hard on your business and come out of the other side stronger.
Decide on your desired outcomes at the beginning of the process, for example, the longevity of the business. Once decided, you should be prepared to be flexible on other matters. Keep your main objective in mind and try not to get caught up in arguments over less important things (which, believe me, happens a lot!)
Consider Settling Out of Court
The Court is dealing with an increasing backlog so where possible you should always strive to settle your finances out of Court. This may also allow a more flexible and creative outcome that is more tailored to you and to your family. Consider a round table meeting to resolve financial matters as soon as possible.
Don’t Forget a Pre-Nuptial Agreement
After a divorce, you may not want to rush into another marriage but after time, if you do decide to remarry, I would strongly advise you consider having a prenuptial agreement drawn up. While not legally binding, a pre-nuptial agreement does hold weight in court and can provide peace of mind that your pre-marital assets are preserved.