In 2010, researchers from Virginia University published a report showing that forty to fifty percent of first marriages in America finish in divorce. With second marriages, the rate of divorce is higher still. All areas of your life are affected when you go through a divorce. If you own a business, a divorce is especially traumatic, because you might be concerned about the ramifications for your business, and whether you can weather the storm while the proceedings take place – and during the aftermath. Taking sensible measures to safeguard your business, if you wind up in a divorce court, will increase the likelihood of a favorable outcome and give you peace of mind. Here are five tips that will help your business survive your divorce unscathed.
1. Enlist the Services of a Divorce Attorney and a Business Attorney
As the owner of a business, the first thing you should do when faced with the prospect of divorce is find an attorney who can guide you through the process. Chances are, you will require a couple of attorneys to fully protect your interests. Divorce attorneys can assist you with the divorce itself, while business attorneys can help you look after your business. Before you hire anyone, check that they have successfully handled similar cases before, and that they have a good reputation.
There is no better time to hire an accountant than when a divorce is looming, so do this if you have not done so already. These professionals can help keep your business finances in good health, when you most need them to be. Collect all your bank and business statements, financial documents, contracts and other paperwork related to your marriage and business. This makes your accountant’s job that much easier.
3. Give Your Partner the Sack
If your partner takes an active role in your business, relieve them of their duties as quickly as you can. This might seem a bit harsh, however it is necessary. The greater the role your partner plays in your business, and the longer they have worked there, the more an attorney can argue that they were instrumental in building the company and should share in its’ proceeds.
4. Watch Your Own Back
Next, you need to divide your assets up and agree whether to dissolve your business, sell it, or carry on running it. If you own a property with your partner, the mortgage should be refinanced into your name or your partner’s, unless both of you decide to sell it. Once the divorce proceedings are over, you want every asset you own to be fairly divided.
You could be vulnerable to fraud or credit reporting mistakes, if you keep joint accounts following a divorce. Make sure you cover your business and yourself against this possibility, by separating every asset, debt and joint account. You are still responsible for the whole rental payment or mortgage, until you either sell the property or refinance it into your name – regardless of whether your partner contributes to the bill.
5. Obtain an Impartial Valuation
You will have to get your business valued, at some stage in the divorce proceedings. This enables the court to determine the impact of your business finances on your divorce settlement. Primarily, your partner’s attorney will be safeguarding their interests, possibility at your expense. Therefore, it is wise to get an impartial valuation professional to value your business. You can ask the court to appoint someone to do this, and you can hire an impartial third party to assess the first valuation if you wish.
Running a business during a divorce is a challenge, however it is possible. Lots of businesses make it through a marriage break up. The above advice will maximize your chances of securing your financial future, as you advance into a new chapter of your life.