There are currently 5.5 million businesses in the United States. A big number to be sure, and one that is understandable: Many parents want to secure a legacy and a stable financial future for their children and their children, and it seems like a reasonable thing to do for spouses who are experts in the same industry and keen on the same interests. It’s a good idea—until spouses who both own the business decide to divorce.
Going through a divorce can be an emotionally, mentally, and financially draining experience. But when you add a family business into the equation, it can be downright impossible. This scenario can be incredibly messy and tricky for all sides, especially if children are also involved. Here are some pointers to help you navigate it better.
Get the right attorneys
The traditional and more straightforward route goes something like this: Both parties hire their attorneys, discuss how they want to split all of the marital assets, then establish a written agreement to resolve the issues so that they can cleanly go their separate ways.
However, when there’s a business involved with big assets and finances at stake, you might want to hire lawyers that can cater to your business’s specific needs, such as an intellectual property law firm if your business has to do with inventions, holding patents, and creating something new.
One example of a couple who found issues with intellectual property was the artist Margaret Keane and her husband Walter Keane, who stole all of her paintings and passed them off as his own. Walter tried to take all the credit for the paintings when his wife truly created them.
But because all this took place in the 1920s when the Visual Artists Rights Act of 1990 was not yet in place, Margaret didn’t have a lot of legal recourse. But things are different now, and with the right attorneys, you can ensure that what’s rightfully yours will end up assigned to you after your divorce is over.
Opt for a mutually beneficial agreement
While spouses divorce for various reasons and not every couple separates amicably, it would do you and your spouse a world of good if you decide now to create a mutually beneficial agreement—especially if there are children involved.
If both of you are motivated to move forward, it would be most advantageous to deal with all of these processes, like business valuations, upfront and as soon as possible, instead of stalling and trying to win everything. Competent divorce attorneys prefer these open-and-shut cases because you might never be able to fully ascertain the exact amount you have put into the business and your assets.
Keep watch over the valuation of the business
Divorce attorneys usually know an army of financial experts who are incredibly skilled at identifying just how much a business or a company is worth. These experts exist because courts have to know what marital property is before they can help you split it. Watch over this process, and don’t be afraid to ask your lawyers whatever questions you may have, no matter how basic it may seem to you. Check if you live in an equitable distribution state and how it will affect your divorce.
Consider going through a divorce mediation
Instead of going to the courts, you and your soon-to-be-ex-spouse can also consider attending a divorce mediation. It’s where you can seek a successful resolution to move forward with your lives as single people. This is minus the stress of going through long proceedings and letting go of hundreds of thousands of dollars.
A good mediator is fully trained and neutral. They can help you reach agreements on conflicts that you and your spouse need to address. This can be child custody and support, and yes—property and assets division.
Check your prenuptial agreement
This should be the first step when dealing with a divorce that involves a family business. Check if the agreement specifies how the two of you will handle the family business in case of a divorce, and seek help from your attorneys in navigating the document. Review if there’s anything you need to execute now and be at ease knowing that most states require prenuptial agreements to be fair to both sides.
Going through a divorce with a family business involved is tough, but you don’t have to go through it alone. Make sure you have the right team of lawyers in your arsenal and believe that there is still a bright future waiting for you as a single person.