Family Law Attorney Can Help When You’re Divorcing Your Business Partner
Carlsbad, CA – What happens when a divorcing couple owns a business together? In the past, this may have meant a dissolution of the business, or that in the divorce settlement, only one person would be awarded ownership of the enterprise. Today, that has changed.
Trends show that couples are divorcing later in life than ever before, having amassed valuable assets, including businesses. When they come to a point of divorce, instead of automatically selling off what they worked so hard to build up, these couples are finding creative ways of working around their legal separation and divorce to continue growing their entrepreneurial undertakings together.
The Benefits of Deciding to Continue to Do Business Together
A couple that has agreed to settle the division of their business assets out of court is usually one who can meditate effectively. A trusted family law attorney will still usually have both partners draw up a proposal about how they will approach the business, and then help to fine-tune their asset division divorce agreement to reflect the status of the business as a shared entity.
There are numerous benefits to continuing a business enterprise together. First of all, when asset division time comes in the court, a long process of evaluation begins. It can put all business processes on hold, hurting profit and straining both people in the divorce financially.
Also, when a market value is assigned to the business by an experienced accountant, how the economy looks and how the commercial market appears at that point can negatively affect the value for which it can be sold, should the judge order liquidation. If the divorcing couple decides to hold on to the business until a better time comes economically, even if they ultimately decide to sell the business together, they will both benefit financially from it. In the rush of divorce proceedings, sometimes the spouses cannot think past the immediate bitterness and the desire to end all joint ventures. A good family law attorney, however, can put in a clause to the division of assets document in your divorce agreement regarding your corporate plans for your business.
Secondly, a traditional court-ordered division of assets considers whether the business was a marital asset or one that a partner brought into the relationship to determine who will end up being awarded ownership of it. Even if a Forensic Accountant looks through all the records and books and determines that marital funds were used for the business, it is still usually only one person who receives this asset. The other one may be compensated for their investment. Yet, this does not always make sense for the health of the business in terms of Human Resources.
Sometimes, replacing the talent and knowledge of one partner may hurt the business should they lose their role in it. What if your business relationship just works and hiring someone new for heading important operations your ex-spouse was brilliant at is just a risk you’d rather not take? It’s certainly a possibility that both partners can keep benefitting the business with their passion and specialized knowledge of its inner workings while still maintaining a civil relationship as colleagues. If you both enjoy the business and wish to continue cultivating it, consider employing a professional corporate conflict resolution coach to help you with the personal side of things when transitioning from a family unit to a strictly business partners arrangement.
Tips for Success
In order to keep operating as a corporate team with your ex, it is important to establish some things. Fist, company by-laws must reflect that even with the change of your personal relationship, both of you have defined roles within the business. Delineate them clearly in the document. Also, write a clause that describes how you wish to proceed in case either party wants out in the future.
With the help of a family lawyer, make sure your divorce and asset division document–and not just company by-laws, reflect your binding plan of action should one or both of you decide to sell the business publicly, or buy out your ex-spouse’s share in the future.
Establishing separate offices can help set personal boundaries while keeping the business humming along. If that is not possible, a schedule where each partner alternates coming to the office and working remotely, can be beneficial. Also, consider hiring a personal assistant that can act as a reliable reporter between the two of you if things get tenuous at any point.
While continuing to function as business partners through divorce is tricky, it is not impossible if you arm yourself with good legal and conflict resolution strategies.
Having these legal boundaries set in place will help you to run your business more effectively, without worries or threats clouding anyone’s judgement.
If you are part of an entrepreneurial couple who is heading towards divorce but wish to continue to supply your family with the fruit of your business’s success for years to come, get professional legal assistance. To retain the services of our California family attorney team at Griffith, Young & Lass, simply call.
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