The breakdown of a marriage and subsequent divorce is an unfortunate chain of events that can prove to be very stressful and challenging.
However, for business owners, there is the additional concern of how the division of assets during a divorce will impact their company.
A divorce is a difficult experience both on a personal and financial level, so naturally, the effects of this will bleed into your professional life. As a business owner, your company is something you will rely on for post-divorce financial stability, making it essential that you do everything you can to protect it. A crucial part of this is ensuring that the division of assets is fair but also allows you to sustain a successful business.
Does My Spouse Have a Stake in My Business?
When it comes to the division of assets in a divorce, the court will always do its utmost to make sure that the starting point of a financial settlement is equal — from there, the judge can navigate the divorce process to find a resolution that is fair for both parties. You could deploy arguments to dispute the presumed 50/50 split, and in this case, you will have a better chance of succeeding if your company was established before your marriage.
You may come to find that the courts determine that a 50% split is valid, but depending on the arguments put forward or the nature of the divorce, this could differ. In such a situation, the court will consider liquidity and work with you to see what can be sold from your company to satisfy your spouse’s fair share. This will likely come in the form of capital or property.
Although you may have a basic idea of what to expect regarding the division of assets, your first step should always be to get an accurate and up-to-date valuation of your business assets. Your company accountant will be able to oversee this initially, but if there are any issues or disputes from your spouse, you will need to seek the assistance of an independent accountant to provide sufficient findings for the court.
Compromise and Logic Can Save a Company
There have been many high-profile high-net-worth-divorce cases where business assets have come into play and impacted the financial settlement. A recent example of this is the divorce of Jeff Bezos, the founder of eCommerce giant Amazon, and his wife. As the richest man in the world with an estimated fortune of $157 billion, Bezos had a lot to lose if his wife looked to attain 50% of his assets. Fortunately for him, she was satisfied with a $38 billion settlement that provided her with a 4% share of Amazon.
This not only shows how logic and reason make a divorce a much more straightforward and advantageous process for both parties but also how compromise is often the best choice for business owners looking to protect their company. Failing to do so could lead to you having to break down your company or sell off assets such as property, which, in many cases, can spell the end of a business.
Seek the Help of a Reputable and Experienced Family Lawyer
The division of assets and every other aspect of divorce will require the advice and guidance of an experienced family lawyer. This should always be your first step because neglecting to do so early on could lead to you making rash or ill-advised decisions, which could then impact the result of your divorce settlement.
A reputable law firm with previous experience in cases involving business assets will prove to be hugely beneficial, as a solicitor will not only provide vital knowledge throughout the divorce process, but they’ll also be a fantastic resource when it comes to beginning your post-divorce life.
KMJ Solicitors is a specialist family law firm based in London. Its team specialises in all areas of family law including divorce, high-net-worth divorce, child law, prenuptial agreements and much more.