Divorce for business owners: Separating emotions from money
Divorce can be difficult and stressful for small families businesses.
Many couples who are married also co-own small businesses. Because spouses are more likely to trust each other than business partners, it can be especially beneficial to run a business together. As the Financial Post points, divorce is a common outcome of marriages. Business owners who are also married can be at risk for their livelihoods and their business’ survival. While it is easy to divide your personal assets, it can be difficult to divide business property during divorce.
Absence of an agreement
Family businesses often have an advantage over others due to their trust. However, this trust can also prove to be detrimental. According to the Globe and Mail, joint-owners often neglect to plan how the business will handle a divorce. It is not common for couples to believe they will ever divorce. However, this leads to them overlooking a very serious threat to their livelihoods by failing to address the issue in a shareholders agreement.
In the end, not only does it put divorcing couples at risk financially, but so do their employees, customers, and clients. In the event that neither spouse can agree on the business’ value, employees can become anxious and could discourage customers or new clients.
Money and emotion
Divorce can bring up unexpected problems, regardless of whether there is a prior agreement. A divorce can create problems in business valuation, particularly if one spouse is trying to buy the other. If one spouse agrees to the valuation, it could put the other spouse at extreme disadvantage. The other side of the coin is that a spouse who wants to buy out his or her ex-spouse’s share in a business may find it difficult to agree on a valuation.
Many of the difficulties associated with divorce and business often stem from emotions. Even under the best circumstances, divorcing can be a difficult process. Two people who are no longer able to trust each other can make difficult business decisions together. This can have devastating financial consequences for either side.
Family law
When a couple is going through a divorce, there is a risk that emotions can lead to poor business decisions. A family lawyer is a good choice. A good lawyer will offer advice that is objective and based on years of legal experience. This will allow clients to protect their livelihoods as well as best interests.
Mediation in Divorce: One of the many ways to control costs in a separation
When ending a marriage, one of the most important concerns is the financial impact it may have. In addition to the immediate expenses of moving and legal fees that can be incurred, there are also long-term costs associated with running a single household. There are still ways to lower costs. Albertans can reduce their divorce costs by mediation, communicating clearly and properly preparing for legal meetings.
The collaborative divorce and mediation options allow couples to resolve their problems without the need for court involvement. Although they will still need legal representation, the individuals will be able talk directly with each other and reach an agreement. Although this is less costly than going to court it still requires compromise on the part of both parties.
Whatever the method used to mediate, careful planning is key to avoiding ambiguity in order to make it easier for a couple and their children. Lawyers can save time by having financial records organized. Also, it is possible to make them available digitally if necessary. It is also possible to send emails rather than calling lawyers and make requests that are easy to understand.
Even if mediation is not possible on all issues of a divorce case, it may be possible to compromise certain details in order to reduce costs. One example is that a couple may reach an agreement on the home’s value, which would avoid the need for appraisals. You can also avoid bank fees by agreeing on how your retirement accounts should be set up. These decisions and the possible outcomes can be discussed with an Alberta family attorney to help ensure that final divorce documents are legally correct and complete
Additional Resource:
https://nationalaffairs.com/publications/detail/the-evolution-of-divorce
https://www.nccourts.gov/help-topics/divorce-and-marriage/separation-and-divorce
https://www.familymeans.org/effects-of-divorce-on-children.html
