Business owners facing divorce: How to keep emotions and money separate
Small family businesses can pose a serious risk during a divorce.
Many couples are also joint-owners in small businesses. A spouse may be able to co-own a business, which can be very beneficial as they trust each other more than any other business partners. The Financial Post points out that many marriages end in divorce. For business owners who were also married, this can lead to the loss of their livelihoods as well as their ability to continue their business. Although it may seem simple to divide personal assets, the process of dividing business property can be complicated Business owners facing divorce.
Inadequacy of an agreement
Many family businesses have a strong sense of trust, which can prove to be a benefit. The Globe and Mail reports that couples who share ownership of a business are often not able to discuss how the business will be handled if one or both owners divorce. Many couples don’t want to believe they will ever divorce. This leads them to ignore a serious risk to their livelihood and not address the issue in a shareholder agreement after a business has been established.
The agreement is not only a financial risk to the divorcing spouses, but also to their employees, clients, and customers. For example, if neither spouse agrees on the value of a business, this can cause anxiety in employees and discourage existing customers and clients.
Money and emotion
No matter if there was a pre-nuptial agreement, divorce can cause unexpected and difficult issues. Particularly if one spouse wants to buy out the other, business valuations can be problematic. One scenario is that a spouse might be at a disadvantage if he or she agrees to the valuation of the other spouse. However, a spouse trying to purchase out their former spouse’s shares in the business might be hindered by the insistence of the other party on a high valuation.
Emotions are often at the root of many problems in business and divorce. Even in the best of circumstances, divorce can be difficult. The financial consequences of a divorce can be devastating for one party if they are unable to trust the other and have to make crucial business decisions together.
A divorce can lead to poor business decisions if emotions are allowed to run wild. This is why it is important to contact a family lawyer. The right lawyer can offer clients advice that will help them protect their assets and best interests following a divorce.
Divorce mediation: One way to reduce costs during a separation
People are often concerned about the financial consequences of ending a marriage. The longer-term financial challenges of managing a single household can make short-term expenses such as legal fees and moving more expensive. There are many ways to reduce costs. Albertans can reduce the cost of divorce by using mediation, communicating clearly, and preparing properly in advance of any legal meetings.
Couples can work out their issues through mediation or collaborative divorce. While each person will retain legal representation, they will be able communicate with one another to reach a mutually acceptable settlement. This is an alternative to going to court. However, it does require compromise from both sides.
No matter if one uses mediation, careful planning can eliminate any ambiguity and help to settle a divorce. It can help save time and money for divorcees by organizing financial records and making them digitally accessible if they are possible. A similar reason is to email lawyers instead of calling them and make your requests simple.
Even though divorce mediation may not be possible for all aspects of a divorcing couple, they might still be able to reach an agreement on some details to save money. A couple might be able to reach an agreement about the value of their home without having to pay for appraisals. They may also agree to share the organization of their retirement accounts, which could help them avoid paying bank fees. Talking with an Alberta family lawyer about these issues and possible outcomes can help ensure that the final divorce documentation is complete and legal.