Advice for Protecting Your Business Assets During a Divorce
There’s no doubt that a divorce is tough for anyone to deal with, but for people with business interests to maintain, the division of assets can be an especially worrying time. In this post, a specialist high net worth divorce lawyer will provide their insight into what business owners can do to protect their company’s assets.
During a divorce, there’s not only the emotional trauma of a breakup to tackle — there is also the potentially enormous impact on the rest of your life in regards to finances. For business owners, this spells a severe threat to both their current and future business ventures — especially in high-net-worth divorces, where a vast range of high-value assets and large sums of money are divided between spouses.
Shop around for Family Lawyers Which Suit Your Needs
Whether you and your spouse have already agreed to get a divorce or it’s something that you believe to be inevitable, the first thing you need to do is seek high-quality legal advice. Your best bet for a divorce is to shop around for a reputable firm who specialises in family law. You’ll want to find someone who has previous experience in dealing with the division of business assets.
You’ll find that high net worth divorce lawyers are often an invaluable resource when it comes to the division of assets, as the majority of high net worth divorces will include business-related assets in the divorce settlement. The skills and knowledge they possess — thanks to previous experience with business owner divorce cases — will prove to be crucial during complicated or even hostile aspects of the divorce process.
The advice and guidance you receive from a specialist family lawyer will be vital for ensuring that the decisions you make during and after your divorce are well thought out, rather than rushed or made in the heat of the moment. This is essential for business owners looking to maintain or protect assets which are critical to the future of their company. Therefore your choice of legal representation isn’t something you should rush. Take your time, schedule some consultations, and find someone who suits your needs.
Does My Spouse Have a Stake in My Business?
The court will do its utmost to make sure that the starting point when dividing assets is equal. As a shareholder or business owner, you may be able to put forward arguments to dispute the presumption of a 50/50 split. You have a better chance of doing this successfully if you established the business before you met or married your spouse.
Step one should be valuing your company’s assets. Although this initially can be handled by your regular accountant, you might need an independent forensic accountant’s report if your spouse disputes the value of the assets. Once a value has been established, the next step is to agree on the percentage that your spouse is entitled to.
In some cases, this is indeed 50% but, depending on the nature of the case, it can vary. If the latter should occur, the court will consider liquidation and try to determine if the company can sell anything to satisfy the agreed amount. In most cases, this will be funds or property that the business can survive without.
Pre Divorce Mistakes That Cause Problems
Divorces have a habit of getting hostile and stressful when the time comes to divide assets, which is why some people look for ways to protect themselves before the proceedings begin. Unfortunately, the following actions may seem like a sensible thing to do at the time, but in the long run, they can make things a lot more complicated:
Reaching an agreement before you speak to a family lawyer: Without the knowledge and resources of a divorce solicitor, you won’t have a clear idea of what assets your spouse possesses and how they will be divided. This can cause serious problems and hostility if you realise later that the agreement was more advantageous to your spouse.
Obtaining information that isn’t yours: As we mentioned above, you may not know the full extent of your spouse’s assets. But does that mean you should take it upon yourself to find out — say by opening their mail, logging into their bank account, or reading their emails? No, no, it doesn’t. Evidence gained in these ways is generally not admissible.
Transferring assets: If your goal is to protect your business assets, your instinct may be to transfer certain assets to offshore accounts, trusts, or even a third party. This is not advisable as the court will see this as an action carried out to deceive them and your spouse — so doing something along these lines could prove to be self-sabotage when the time comes to divide your assets.