Protecting a family business from the impact of divorce can be key to achieving an effective financial settlement. It requires lawyers with an understanding of the commercial and practical realities.
We are not just divorce lawyers. We're business lawyers.
There's no hiding the fact that divorce has a financial impact. The wealth the family had pre-separation has to be divided up to support two new separate households so the objective must be to preserve the value of the available assets as much as possible. This is particularly important when there's a business and in most cases keeping a business operating profitably rather than selling it will be the best way to achieve this.
Whether planning in advance or dealing with it at the time the relationships breaks down, minimising damage to a business on divorce requires legal advice, expertise and experience that goes beyond just family law. It requires lawyers with a real understanding of how businesses work and the wider picture. With an ability to think creatively and commercially. And with access to a network of other trusted business experts.
We work closely with our colleagues in our wider private wealth, tax and corporate teams, together with carefully chosen external advisers, to ensure that no stone is left unturned when it comes to advising you on the best way forward and protecting your interests.
Experience has taught us that the best way to avoid damage to a family business in a divorce is to plan ahead. Effective options include:
- A pre-nuptial or post-nuptial agreement. This might provide for one spouse to retain the business with the other having more of the non-business assets to ensure the agreement's fair and will be upheld if challenged in court
- Trust structures. As well as having tax advantages, trusts are a good way of passing assets such as a family business down through the generations
- Restricting the transfer of shares to a non-owning spouse through a company's articles of association
If the only way to have a fair overall split is for both you and your partner to have an interest in the business, other factors will need to be considered such as:
- Directors' service contracts that make your respective responsibilities, pay and benefits clear
- Whether you have different classes of shares with different voting rights
- Protection if one of you has a minority interest
Often dispute resolution options like mediation or collaborative law will be the best way to resolve these complex issues.