Angela Moores says “divorces involving family business’ or farms are often the most difficult financial settlements to conclude Ð it’s essential to choose the right lawyer”.
In today’s economic climate there are many storms for any family business to weather, but for both the farming or business community alike, none comes worse than the emotional and financial upheaval caused by a divorce in the family.
Any shareholding or interest the husband or wife may hold in a family business forms one of the assets to be considered for division upon divorce. This can be distressing for all concerned, not just the couple separating but also for other family members who are business partners, innocently caught up in any dispute over the family business. Everyone’s interests are potentially at risk.
Matters being analysed by the court in minute detail in such dispute can include valuation of the interest or shareholding, the liquidity of the business and ability to extract monies, as well as complications over additional land and buildings owned.
Often there are also interests in the company pension scheme to be considered which scheme often owns the building from which the business trades. Unravelling this situation can be complex and must be handled by an experienced specialist financial settlement and pensions focused family lawyer if all those with an interest in the business are to be protected and the business enabled to continue.
I am one of the few lawyers in the north of England to be Resolution Accredited at Stage II in Financial Settlement on Divorce for financial settlements comprising complex financial assets on divorce including business assets.
I have many years experience in handling divorce and separation issues involving family businesses and farms. This is one time instance when I do not advocate sitting back and waiting if the prospect of a divorce raises it’s head Ð key assets need to be protected fast.
It is important for everyone involved to ensure the correct professional experts are instructed to consider all options with valuations, taxation implications and strategies going forward to ensure the business and the livelihoods of others are not placed at risk whilst at the same time achieving a fair outcome.
Arguments about “contribution” arise if the business interest was in place prior to a marriage or was later gifted to the couple by one party’s family during the marriage. Often a business has been built up during the term of the marriage and it can be complex to determine a specific share in a business which has been run on a relaxed basis by a trusting family. Potentially other family members involved who may derive their own income from business the need to consider receiving independent legal advice to protect their own positions.
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