Getting divorced is never easy but when coupled with trying to continue to run a business, it can be particularly stressful. Having helped a number of business owners through their divorce, I would advise that sitting down and taking expert legal advice at the outset is vital – helping to clarify your position and trying to set out the best way to move forward.
Here are a few considerations that may be useful for business owners heading for divorce or separation.
Consult experts at an early stage.
If you own a business, be it a partnership, limited company or if you operate on a sole-trader basis, it is likely that this its value (whether in terms of capital or as an income producing asset) will be taken into account in a similar way to the value of the marital home, savings and pensions and included within your ‘marital pot’. Although the courts can order businesses to be sold, it is most unusual. It is much more likely that a court will order the non business owning spouse to have more of the property or cash owned outside the business and/or order maintenance to be paid out of the income stream from the business. Business owners should seek advice from a solicitor experienced in representing entrepreneurs and business owners as the complex financial issues involved require specialist advice.
Consider mediation/collaborative law.
There is growing support for alternative methods to resolving divorce and financial settlement and it is sensible to explore these. If possible, court should be a last resort; mediation and collaborative routes tend to me more amicable and also cost effective. Such methods are often favourable where a business is concerned, as they allow for more flexible outcomes than the court, which tends to be quite rigid in the outcomes it prescribes.
Keep a cool head.
The process of reaching a financial settlement within divorce proceedings can often bring out a hard edge to your spouse’s personality. Amongst the arguments, keep sight of the end goal. Many business people often channel their frustrations into a determination to work harder on their business, coming out stronger at the other side of their divorce.
You should decide on your required outcomes at the outset of the process – in this case, the longevity of the business – and be prepared to be flexible on other matters. It can be easy to get carried away when negotiating a divorce settlement, but you should keep in mind your main objective and try not to get caught up in arguments over less important things (which believe me, happens a lot!).
Consider pre-nuptial agreements.
Following a divorce, it is unlikely that you will be thinking of is rushing straight into another long-term relationship. However, if and when you do find yourself in this position, you should consider having a pre-nuptial agreement drawn up. Such agreements are currently not binding on the Courts, but they are gaining in influence and in certain circumstances, they do carry ‘decisive weight’.
For further help or initial legal advice on divorce, please get in touch. Our experienced family lawyers can assist with all matters arising from divorce and have represented many business owners during divorce proceedings.