January has traditionally become synonymous with a spike in couples seeking to end their marriage after the strain of putting on a united front over the festive period.
Relationship experts blame the upturn on the stress of trying to live up to a perfect ‘chocolate box’ Christmas, especially during a period of relationship difficulties.
In January 2017, Relate received a 24 per cent increase in calls to their helpline compared with the average month, and counsellors are preparing for a similar peak this year.
If the worst comes to the worst and there is a separation or divorce then splitting a couple’s assets is less than straightforward if one party is the owner of a business.
Here, Surjit Verdi, an Associate in our Family Law team, explains what every business owner in this situation should be aware of:
“During a divorce or the ending of a civil partnership all assets come under scrutiny. Questions relating to the value of the business, the income it is able to produce, including whether in fact, it should be producing more, will all be asked and the outcome of this assessment will be highly influential when deciding an equitable financial settlement.
“It is worth considering the following:
- A pre-nuptial agreement or post-nuptial agreement can help to limit claims against a business
- Wherever possible, do not mix your business assets with your private assets
- Weigh up the pros and cons of involving a spouse or civil partner in your business. Although it can be beneficial for tax purposes, your spouse or partner could have a greater legitimate claim to contributing to your business’ success in the event of relationship breakdown
- Shared business ownership with a third party can be beneficial in the event of divorce. If a business is wholly owned by a divorcing spouse, the courts will treat it like any other asset but if the enterprise is jointly owned with other shareholders or partners a court will be less willing to jeopardise the livelihoods of the other business parties
“This is a complex area of family law and it is important to obtain specialist legal advice to properly protect your business interests.”
For help and advice on all aspects of divorce including advice for business owners, please contact us.