Divorce and separation are very challenging on both a personal and emotional level, but for business owners, the divorce process poses a potential threat to the future of their company. During a divorce, there are many different aspects to consider and adjustments that will be made before you enter post-divorce life. One of the most crucial of which is the division of matrimonial assets. As a business owner, this will include assets relating to your company.
Depending on the size of your business, you may be able to part with certain assets to satisfy the terms of a financial agreement. Whereas for others, the loss of assets can cripple the entire enterprise. In this article, we’ll provide you with a few vital things to know when it comes to protecting your business during divorce and separation.
Step One – Shop Around For A Skilled And Experienced Family Lawyer
When it comes to complex legal matters such as divorce and separation, your first step is to seek the advice and guidance of a family lawyer. But not just any lawyer or the first divorce solicitor you happen to stumble upon.
To ensure that you find the best person for the job, and someone you feel can represent you most effectively, it’s essential to shop around. By doing so you not only have a better chance of finding a family lawyer with experience in matters with divorce and business, but you can also use consultations as an opportunity to see if their approach suits your needs.
This first step is critical for business owners as a highly-skilled family lawyer can cater an approach that suits the needs of both you and your company. Using their expertise and experience in similar cases, they can help you to reach a resolution that protects your business in the present and future.
Can My Spouse Take Assets from My Business?
When it comes to dividing matrimonial assets, the court does its utmost to make sure that the starting point is equal. As a business owner or shareholder, you may be able to argue against the presumption of a 50/50 split. You would have a much better chance of achieving this if you established the company before you met or married your spouse.
The first thing you need to do is to value your company’s assets. Initially, this can be handled by a regular accountant, but you may need the assistance of an independent forensic accountant using a forensic accounting service if your spouse disputes assets’ value. Once the amount is established, you will then need to agree on the percentage that your spouse is entitled to.
While in many cases, this does turn out to be 50%, it can vary somewhat depending on the nature of the divorce. If the latter does occur, the court can consider liquidation to determine if the business can sell anything to satisfy the agreed amount. This tends to be funds or property that the company can survive without.
Pre-Divorce Mistakes You Should Avoid
Divorces often get hostile and complicated when the time comes to divide assets, which is why people seek out ways to protect themselves (or their business) before the divorce process begins. For many divorcing couples, the following decisions might appear to be the sensible thing to do at the time, but they can make things a lot more complicated in the long run:
- Reach agreements before you speak to a family lawyer — Without the knowledge and advice of a family lawyer, you have a clear idea of the assets your spouse possesses and how they will be divided. This will cause severe issues and hostility if you come to find that the agreement was more beneficial to your spouse.
- Transferring assets — If protecting your business assets is your primary goal, you may be tempted to transfer assets to offshore accounts or a third party. This isn’t a good idea as the court will deem this as an attempt to deceive them and your spouse. An action such as this could prove to be self-sabotage when the time comes to establish the terms of a financial settlement.
- Obtaining your spouse’s information — As we mentioned above, you won’t always know the full scope of your spouse’s assets. But that doesn’t mean you should endeavor to find out — for example, by opening their mail, reading their emails, or logging into their online bank account. Evidence regarding assets gained in these ways is generally not admissible and will only reflect poorly on your case.
KMJ Solicitors is a specialist family law firm based in London. Their team offers bespoke law services for matters including divorce and separation, prenuptial agreements, child law, and much more.
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