Navigating your way through the breakdown of a relationship is stressful enough. When there are also business assets involved – especially if it’s a family business – it’s crucial to seek professional advice that supports both you and the business.
When business and divorce are linked, things can get complicated and emotional, so we apply our expertise to help make the process as stress-free as possible, and the outcome as fair and favourable as possible.
Our expert Family team brings together the specialisms of our top-ranked Family Law team and the practical business acumen of our highly regarded corporate lawyers. This means you have access to our substantial experience advising clients through divorces that involve business assets.
The valuation of a business for divorce purposes is a complicated area, so we often work with independent specialist valuers and accountants to ensure we determine the appropriate value of the business interest in question, taking into account the interests of third parties and the nature of the specific business. There are several approaches to business valuations, and combining expert legal and accountancy advice can have a big impact on the legal outcome.
It’s unusual for a business to be sold and the proceeds divided, or for shares in a company owned by one spouse to be transferred to the other. The court’s primary aim is always to separate the couple financially, and it will therefore be reluctant to order the sale of an income-producing business. This may not be possible anyway due to other shareholders’ rights.
Normally, a value is placed on business interests which are then factored into the division of the couple’s overall assets. The level of risk associated with maintaining that business can be factored into the percentage division of the total pot.
If your business existed before the marriage – or you or your spouse received it as a gift or inheritance – all or part of the business may be classed as ‘non-matrimonial property’, and be ring-fenced as separate from the matrimonial assets which are always shared on divorce. How inherited businesses are dealt with in divorce proceedings will depend on the level of other financial resources involved.
If you or your spouse are thinking about divorce, and you both own assets in a business, it’s vital you take legal advice as early in the process as possible. Any uninformed decisions you make now could potentially damage your position later, particularly when it comes to tax.
With the right specialist guidance, at the right time, there are simple but effective steps you can take to safeguard your interests and minimise any risks.