Going through a divorce can be a very stressful and worrisome time. Navigating the various different issues, and dealing with the emotional stress can take a toll. A divorce case can have a variety of issues, but it can become especially difficult when a family business is involved. Whether the parties are co-owners of a business, or the parties work together at a business, it can cause the case to get fairly complex. Fortunately, there are certain steps both parties can take to ensure an efficient and unintrusive resolution to the divorce case when a family business is involved.
Prioritize the Business
During a divorce, tensions can run high between parties. When those parties are working together at a family business, it can come out in forms that may be detrimental to the business. A good rule to remember is to always put the business first. It is crucial that both parties continue to work at the business in a manner that ensures the business runs as efficiently and as successfully as possible. After all, the business is a source of income for both parties, and that income is necessary to continue day to day life. Compromising the success of the business for the sake of emotional tension is neither responsible, nor worthwhile.
It is important to continue making decisions that benefit the business first, and make adjustments when necessary that will help prevent stressful or tense situations. If both parties are required to be at the business at the same time, work to set up a schedule that helps avoid that scenario whenever possible. When making decisions regarding the business, focus on the financial needs of the company, and its historical practice. Taking these steps will allow your business to continue to thrive, even if a divorce case is pending.
Strategy for Division
There are many different ways to approach a family business in a divorce. The strategy that works best for each party will be determined by the specific facts of the case and the relationship between the parties. If the relationship is strained or highly contentious, then it might be a good idea to discuss options of a buy out by one party. If the relationship is strong and the divorce amicable, it may be possible to continue to work together and restructure the business. There are several different approaches to divide a business; an asset approach, an income approach or a market approach. An attorney would be able to advise you as to what the best approach would be best.
During a divorce, communication can get strained and the parties may refuse to communicate with each other. This can be especially taxing when there is a family business to run. The parties have a fiduciary duty to each other in marriage, as well as in a business, and they must comply by those duties. This requires open and clear disclosures of things pertaining to the business. This helps both parties work towards amicable settlement, and keeps the divorce process moving towards resolution and cost effective.
If you find yourself involved in a divorce that has a family business, take steps that ensure both you and your business get the most effective resolution. Be sure to keep things professional, and amicable for the success of your business and the quick resolution of your divorce.