In one of our recent blog posts (September 19), we discussed some of the singular aspects and concerns related to divorcing couples when a family-owned business is involved in the dissolution proceedings. The multitude of considerations involved when that is the case -- ranging from property valuation and a precise determination of ownership to previous contracts in place, stated understandings and other matters -- can seem especially momentous in a high-asset divorce.
A recent Reuters article chronicles how a family business -- whether a recent start-up, established small company or growing enterprise -- can be adversely affected while divorce negotiations are going on and a couple is trying to definitively set forth material matters in a settlement agreement.
A number of challenges can surface to test a business owner's mettle. Acute focus on business matters can easily -- and understandably -- be undermined by the necessity to meet consistently with attorneys, accountants, teachers, counselors and other parties. Professional time is circumscribed by competing moments that require finding paperwork, poring through mortgage, loan, savings and other accounts.
Moreover, a number of additional variables frequently arise that can affect a settlement. What type of business is involved? What is the ownership structure? When were assets acquired? Did the spouse have a business role in the company? If so, what was it?
There are a number of proactive and protective measures that a business owner contemplating divorce can take. A family law attorney with deep grounding in high-asset divorce matters can answer questions and help a client determine what makes sense and is protective in his or her individual case.
Related Resource: Reuters, "Divorce has 'immense' impact on small businesses" Sept. 28, 2011