In Georgia, a divorce that involves a family-owned business and its various considerations – which can centrally include property valuation, ownership, previous contracts and a host of other matters – can be complex and time-consuming.
Although running a family-owned business can bring many advantages, a high-asset divorce can prove devastating and costly if a plan was never implemented to deal with the potentiality that a family business might become a focal point in a dissolution proceeding.
Proactively creating a partnership agreement
A written agreement that spells out clearly how that business is to be run, how the profits are to be divided and what happens in the event of a divorce – for example, how property division is to be carried out – can be an invaluable tool for couples who ultimately decide to part ways.
Unfortunately, many experts say that the great majority of married partners simply don’t get to the point where they rationally contemplate what might, or even what should, happen to their business if their marriage fails. A partnership agreement that specifies what happens to a business if a couple has to divide property pursuant to a divorce can be executed at any time, so a couple’s thought that “it is already too late” is simply incorrect in most cases.
Possible scenarios for the business following a divorce
For married business owners, the family business is more than likely the biggest asset in the marriage. It is also a materially significant asset that is often not easy to liquidate. This means that, even if a business can be sold, it might very possibly suffer a significant loss in doing so.
Although it may be possible for some couples to continue working together after a divorce, this is not often the ideal situation. In order to protect a potential breakdown of the business, it is often suggested by experts that both parties try to compromise and remember to separate business matters from personal matters.
During the divorce proceedings, couples often benefit by hiring a business appraiser to resolve any disagreements concerning the value of the business. Couples are often advised not to make any significant changes to the business during the divorce, so as not to raise concerns with the court.
A proven family law attorney with a deep well of experience help get a tightly written and comprehensive agreement in place that fully identifies and protects a party’s financial interests in the event of a divorce.