Protect Your Business from Divorce
The early part if the year is always a busy time for family lawyers with unhappy spouses seeing the New Year as their chance to make a break. Dividing your assets on separation can be a complex task, but it’s often even more difficult when a business is involved, especially since most business owners have not considered how a divorce might affect their business?
If your spouse is a shareholder or partner in your business, then your business’s future could be at risk. Even if your spouse is not involved in your business, the business is a matrimonial asset, which could be sold or shared in a divorce, unless you take action to protect it.
Things you can do:
- Be prepared – get a pre-nup! If you’re engaged and you own a business, a pre-nuptial agreement is a must. Never mind being an old romantic, put your livelihood first.
- If you are already married without a pre-nup, consider doing a post-nuptial agreement to protect a new business venture.
- Use caution when deciding who owns what in your business. If your accountant advises you to give shares or property to your spouse, or make your spouse a partner in the business, think carefully about it. You may be saving tax, but risking your business’s future.
- Divorce when your business is going badly! Business assets will be valued according to the economic climate so, ironically, a divorce in a recession may be better than divorcing during a boom.
- Don’t be tempted to dispose of assets if you think a divorce is coming – such transactions can be set aside by the Court.
- If it’s looking like a divorce is on the cards, get a good lawyer – ideally one who understands your business and divorce law.
The Romance of a Pre-Nup
Many people consider that a pre-nup has no place in the romantic preparations for a wedding.
However, as a business owner, you should see a pre-nup as the equivalent of those vaccination jabs before the exotic honeymoon – a little pain for a lot of necessary protection. The pre-nup is becoming increasingly common and is now widely established as binding and enforceable in a future divorce. A pre-nup is a real investment in your business’s future.
Negotiations for a pre-nuptial agreement or divorce settlement do not need to be confrontational.
The collaborative law process enables clients to take control of the negotiating process and commit to reaching an amicable settlement around a table. This approach to your divorce is particularly important if you and your spouse intend to carry on in business after the divorce or if you have children.
A group of expert family lawyers in North Cumbria has trained in collaborative law in order to offer this new collaborative approach. For further information on collaborative law in Cumbria visit www.collabfamilylawcumbria.co.uk.
Amy Fallows is a trained collaborative lawyer and family law expert at Burnetts. For further information on divorce and separation for business owners, contact Amy on 01228 5522222.
About the author
Amy is a family law Partner and the coordinator of the employee benefits scheme.
Published: Friday 11th February 2011
Categorised: Family Law