How A Family Business Can Survive Divorce

Under any circumstances, divorce tends to be a long and costly process. When adding a family business into the equation, it can make things altogether more complex as negotiations include sharing this vital asset. Just as your house and income will be placed under scrutiny during divorce proceedings, the value, size and type of business you own will also be analyzed, which could lead to both personal and professional loss. This can all add extra stress to an already difficult divorce process, as you may lose a business to which you have dedicated time, energy and money.

To avoid liquidating, selling or refinancing your business as part of a financial settlement, here are some ways to help the divorce process go as smoothly as possible.

Choose the Right Lawyer

Crucial to any successful and swift divorce settlement is choosing the right lawyer. Poor research can result in selecting the wrong lawyer for your case, which can lead to wasted time and money, as you go from solicitor to solicitor. In the case where divorce involves a family business, seek out a law firm with knowledge and expertise in this area, such as Withers, who can guide you through the process.

A Fair, Unbiased Valuation

When a couple divorces in this situation, it is common for both to value the family business very differently, leading to further dispute and potentially, more damage the company. To keep discussion amicable and ensure that the divorce process goes as easily as possible, seek a neutral professional to analyse and evaluate the business, who will provide a clear and reasoned valuation.

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Arrange Gradual Payments

When negotiating a divorce, consider also discussing the terms on which the financial agreement will be paid. Rather than settling in one lump sum – which could mean disaster for your business – you may be able to pay your ex in prearranged monthly installments. Not only will this protect the business in the long-term, but also provide the income required to make said payments.

Offer Alternative Assets

In divorce proceedings, a family court will typically add up all assets owned by a couple, including a home and business, and then divide as determined by the judgement. In order to retain all, or at least a larger portion, of the business ownership, you may have to be prepared to sacrifice other items. This could include savings, investments, cars or valuable personal possessions.