“I’ve found people think divorce can never happen to them,” says the founder of a company that focuses on financial issues relating to marital dissolutions. “But it can,” she adds.
And when it does, it can have a material and singular effect on couples who developed and operated a family business over the course of their marriage. 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 — and, more importantly, what should — happen to their business if their marriage fails.
According to statistics, which readily indicate the prevalence of divorce, they should be thinking about such things, especially if — as is the case in many family businesses — much of their personal identities and the great bulk of their assets are tied to the business.
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.
A proven family law attorney with a deep well of experience in high-asset divorce and property division matters can 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.
Source: The Globe and Mail, “Divorces mess up firms as much as families,” Wallace Immen, June 4, 2012