If you own a business and are getting divorced under English law, your business will normally be considered an asset for the purposes of your divorce settlement. This means it could be included in the value of any financial settlement you have to pay to your former spouse.
This can understandably be a concern, especially if your business is highly valued. If you take your divorce through a family court, a judge may leave you with full ownership of the business, but compensate your spouse by giving them a larger share of other assets, such as your home. Alternatively, they might divide ownership between you, or expect you to share some of the business’s income with your former partner.
All of these situations can leave you with complications, including the need to continue dealing with your former partner and issues with financing, for example if you have a business loan secured against your home.
For this reason, if you own a business and are getting married, are already married or are getting divorced, there are some important steps you can take to ensure your business stays protected.
Get a pre-nuptial agreement or post-nuptial agreement
One of the best ways to protect your business and other assets from divorce is with a pre-nuptial agreement or post-nuptial agreement. This allows you and your spouse to agree in advance what will happen to assets such as your business during divorce proceedings. This can prevent any confusion, which could have a negative impact on your business, and ensure that you do not end up losing out on other assets in order to keep control of your business.
A pre-nuptial agreement can be put in place before you get married while a post-nuptial agreement can be set up at any time during your marriage. While these agreements are not currently considered legally binding in England and Wales, they will normally be taken into account by a judge as long as they have been created correctly.
Use alternative dispute resolution for your divorce
If you take your divorce through the courts, you are leaving the final decision over how to divide your assets in the hands of a judge. By using alternative dispute resolution, such as mediation or collaborative law instead, you keep control of the process, allowing you to shape the divorce settlement around your priorities.
These methods revolve around agreeing a mutually acceptable financial settlement (as well agreements over other issues, such any children you have). This means you and your spouse can both make sure you get what you need out of the divorce settlement (including protecting your business) while also allowing you to preserve a better relationship by minimising the potential for conflict during your divorce.
Crisp & Co’s divorce solicitors in London and the South East have many years of experience helping people to protect their assets when getting divorced. With a focus on non-confrontational dispute resolution, such as through mediation and collaborative law, we can help you get divorced quickly, cost-effectively and with minimal conflict while defending your business interests and other key assets.
To find out more about protecting your business during divorce, call us now on 020 3797 4952 or use the enquiry form below and we will get back to you promptly.