What happens to our family business if we divorce?
Getting divorced is hard enough but when there is a business involved, it can make the split even more complicated and painful.
In England and Wales, businesses are considered as matrimonial assets and are a key consideration when couples break up along with other assets like property, savings and pensions.
It is the family courts, not the commercial courts, which deal with all related issues whether the business is a trading firm, a company or a partnership.
How will the family business be valued for divorce?
Inevitably, the business will come under scrutiny - things like how much income it produces and the liquidity within it.
In some cases, for instance when the business has what's known as a capital value, it may need to be valued by an accountant appointed by both parties.
Will my ex-spouse be entitled to half the family business?
Obviously, each case is different, but the court will always be sensitive to the fact that for most divorcing couples, running a business together post-split would probably be completely unworkable.
Often, the business-owning spouse will want to retain the business and compensate their ex with a larger share of other assets. If at all possible, the courts will try to enable this to happen.
Will we have to sell the business?
In many cases, the family business is the main source of income for all concerned. As a result, the aim is usually to preserve it.
What commonly happens is that adjustments are made to provide the other spouse with sufficient capital and/or maintenance to address any imbalance.
How do we work out a settlement which includes the family business?
Aspects to consider include to what extent each party is prepared to:
- Share the income from the business;
- Share the ownership of the business;
- Allow for future retirement plans and passing on the business to any children.
Agreeing how the business relationship can be resolved and reaching an amicable settlement with support from a specialist family lawyer, is always the best way forward if possible.
Going to court is not only stressful and expensive but the outcome can be unpredictable too.
Get in touch
It's important to take specialist legal advice when navigating the complications of divorce when there is a family business involved.
Wards Solicitors' highly experienced Family Law and Divorce team can help and advise you on how to safeguard your assets and position.
Also on hand are other Wards Solicitors' lawyers specialising in areas such as business services and commercial property whose expertise can be drawn on if needed when considering the future of a business in a separation or divorce.
We have 12 offices across Bristol, South Gloucestershire, Bath and North East Somerset.
Click here to book an initial meeting.