The complexities which a family business bring to a divorce can be significant and affect the family on a generational level, at what is already an emotional and challenging time.
This is particularly so if extended family members livelihoods depend on the business, or they own part of the business. A situation which can often arise in family farms.
A valuation is likely to be required, and liquidity may need to be considered, particularly if the business is asset rich but income poor. Tax advice will be needed so the implications of any financial agreement are clearly understood. There may also be trusts or issues of inheritance which need to be taken into account.
It is important, therefore, to take early legal advice, so you understand how the business may be treated by the Court and the issues which are likely to arise. This also then allows time to find creative solutions and which can avoid the very difficult situation where a business may otherwise have to be sold.
To protect your business, especially where it is brought to the marriage or inherited you should look to enter into a pre-nuptial or post-nuptial agreement. Although such nuptial agreements are not legally binding in England and Wales they are an important factor, which will be taken into account and significant weight can be attached to them, altering the financial provision which would otherwise have been made.
Support
If you are going through a separation or are looking to get married and would benefit from advice regarding your business and where you stand then please contact Zoe Gaitskell, a partner in the firm’s family finance team on 01824 625821 or zoe.gaitskell@porterdodson.co.uk.
Zoe is a Resolution accredited specialist in complex financial issues and a member of the Law Society’s Family Law Accreditation Scheme. She is recognised in the Legal 500 and Chambers & Partners for her empathy, intellect and expertise in dealing with difficult and complex family law cases.
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