Divorce is a hard enough process for anyone to go through and there are lots of complicated financial decisions that must be made. The money worries can multiply for small business owners who have the added worry of how the divorce will affect their livelihood.
First things first, your business will likely need to be valued in connection with the distribution of marital assets. This will mean a financial expert may need to go over the records of the company and ask questions about expenses and revenue streams. You’ll need to produce extensive documents to verify the numbers in this process. Sometimes valuations, especially complicated ones, can be expensive. Many times each party insists on having their own expert look at the books. The process can be time consuming and can serve as a distraction for employees who must spend time gathering documents.
Though the worst-case scenario in many business owners’ minds is that the company will have to be sold to pay the spouse his or her share of the marital assets, there are ways to minimize the impact of divorce on a small business.
First, hire a good attorney. An experienced Ohio family law attorney will know what to do to reduce the impact of the messy divorce process on the continued operations of your business.
If you have a prenuptial or postnuptial agreement that could come in very handy. Such agreements can predetermine the amount of assets that will be distributed in a divorce and can thus protect a business from being broken up.
If you have partners, take a look at your partnership agreement and see if it addresses a way of buying out or valuing a share of the company if divorce is filed against one of the owners. While this may not control what a family court judge does, it can show that there was an intent to minimize business disruption which the court will likely respect.
If you aren’t lucky enough to have either of the two above agreements, consider hiring a joint financial expert to value the business which will save both time and money. The process will move more quickly if the two of you can agree on one neutral party to conduct the examination.
All involved parties, including attorneys and experts, can sign a confidentiality agreement to protect any sensitive information that is uncovered while examining the business’ books such as trade secrets or other proprietary information.
Finally, to minimize the risk of a sale of the company, you can attempt to structure the settlement with periodic payments to your spouse rather than a lump sum.
If you find yourself facing the prospect of divorce, contact an experienced Ohio family law attorney who can help guide you through the difficult process. Count on the expertise of Twinsburg family law attorney Carol L. Gasper.
Source: “How to Minimize the Impact of Divorce on Your Small Business,” by Jennifer Brandt, published at FoxBusiness.com.
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