4 Tips for Dealing with a Family Business in Divorce
Divorce brings a lot of problems in every part of your life. However, it makes the situation by dividing a family business particularly complicated. Therefore, you have to be prepared and get the necessary help before you start any legal proceedings. There are no avoiding problems when managing a family business in a divorce. However, you can minimize them if you go about it right.
1. Study your papers very closely :
The first and most important thing to do is to get a professional lawyer to examine your business paperwork. They’ll need to see all agreements, contracts, and other papers that have some bearing on defining the ownership of the business.
Note that these examinations might prove to be very surprising. For example, you might find out that some of your distant relatives become stock owners of the company. To prepare for any nasty surprises and develop a strategy for managing possible problems, you need to determine what those problems might be beforehand.
2. Consult as many different lawyers as you need :
Employing the assistance of a divorce lawyer is essential when going through this process. However, in the point mentioned above, you might also need to consult a company lawyer with experience in family businesses.
You’ll also be facing other issues that might require specialized legal assistance. For example, the division of assets during a divorce usually means you’ll need to get a lawyer specializing in foreclosure. If your family business is home-based, you’ll need all three experts’ help. Therefore, it’s usually best to employ a law firm with a versatile team. In case you already have a company lawyer, connect them with your divorce attorney.
3. Talk to a counselor before making any major business decisions :
Roughly 95% of people who received marriage counseling state that they were extremely satisfied with the results. Note that this doesn’t mean they solved all their problems and chose to remain together. What counseling offers is assistance with finding the right direction to move on.
When it comes to managing a family business in divorce, partners usually need to decide whether one will buy out the other’s share or if they can work together. Many people are able to maintain a successful business relationship even after a divorce. A counselor is a person who can help you determine if that would be the right choice for you.
4. If keeping the business, do not make any changes right away :
If you are the partner who gets to keep the business, it might be tempting to ‘bury yourself in the work’. However, you should abstain from making any major changes or improvements until your divorce is legally complete. Otherwise, you’ll increase (or decrease) the value of your assets. This will make it necessary to renegotiate the entire ‘division of assets’ balance and can prolong the legal proceedings. This might also lose you a lot of money in the future and at the very least increase the lawyer’s fees.
Managing a family business in a divorce is always a struggle. That’s why you shouldn’t rush and let your emotions dictate your decisions. Instead, focus on working through your current problems and get professional assistance whenever it’s needed.
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