Dealing with the end of a marriage when the couple has a business
Illinois couples who are coming to the end of a marriage will have a great deal to consider on a personal basis before even thinking about how a family business might be affected. But, this situation does arise quite frequently. There are numerous factors that go into the building of a business. When a couple that was involved in a business chooses to divorce, a dispute can be unavoidable. The value of the business, problems separating the finances involved, and perhaps selling the business are all issues that may come up. Having an idea of how to navigate this situation is key.
Some people make sure to address this before the marriage with prenuptial agreements. A business that was built prior to the marriage might have been written into a prenuptial agreement. The reality of these documents can be more complex with a business involved. While the goal of a prenuptial agreement is to cover all the bases, there might be parts that were missed. Whether the document is all-encompassing or not is a thing to be considered as the marriage ends. Some can have language that deals with the business, what will happen to each side and how much they will receive if the marriage ends. This must be examined in depth.
With a business that is already successful, there might be wealth that the parties would like to transfer to further generations. Having a trust can help with this. If, for example, a parent makes a gift to a child for a certain amount of stock, that can be placed into a trust that will only be of benefit to that child. Some couples can maintain a working relationship and be amicable enough to stay involved in the business together. Having a business structure that can weather a divorce can be useful.
In a business in which one spouse would like to be bought out, the spouse that is retaining the business can make plans to take out a loan to buy out the other spouse, find a different partner who wants to buy in, or sell the business entirely. Doing any of these things prior to the case moving forward can cause acrimony and damage the business and any semblance of a relationship that the couple had even with the marriage ending. Those who are in a business with a spouse and are getting a divorce should keep these issues in mind. Having assistance from an attorney who is experienced in many different circumstances in a divorce can help before and during the case.
Source: marketwatch.com, “How to protect your family business during a divorce,” Daniel Thompson, Feb. 10, 2017