Is Divorce Interfering with Your Family Business?
When business owners get divorced, the business may become a casualty if decisive measures are not taken. Divorcing business owners must consider how the company will be operated during the divorce process; the financial impact of divorce-related obligations, like spousal support and legal fees, on business cash flow; and the influence of rumors and conflict at work. These same considerations apply to licensed professionals, like dentists, physicians, accountants and others who own their own practice.
Business owners and professionals who are facing marital separation can take three steps to prepare for the divorce process. These steps may help to anticipate and control the interference with the smooth operation of your family business:
- Review corporate governance documents, such as stock ledgers, by-laws, business operating agreements, loan agreements, leases and other legal instruments. Make copies and take them to your divorce lawyer before there are any disputes over who will run the business. Develop a legal strategy for maintaining control over your business during the divorce process and limiting your spouse’s interference with employees, vendors, supplies and (most of all) customers.
- If your spouse is employed by the business, consider whether your spouse will continue to work there during the divorce. If you are contemplating employment termination, notify your divorce lawyer (who can discuss the potential impact on support obligations) and consult an employment lawyer (who can steer you away from work-related claims).
- Review the books and consult with your bookkeeper and accountant. Determine whether the company has sufficient cash flow to survive a turbulent divorce period, which might involve new or additional financial obligations to your spouse. Also, think end-game: if you had to “buy out” your spouse’s marital interest in the business, how would you pay for it? Advance planning is always prudent when a business owners gets a divorce.
A divorce doesn’t have to jeopardize the operation of your family business, if you take steps to prepare prudently. Family lawyers who routinely represent business owners and licensed professionals know how to assist in maintaining business stability and productivity, even while the divorce winds are blowing strongly. In the end, you might find your business becomes even more vibrant when the negativity and distraction of an unhappy marriage is behind you.
If you are a business owner facing possible divorce or separation, contact the family law attorneys of Pollock Begg Komar Glasser & Vertz LLC today to discuss your specific situation with our experienced divorce and family law attorneys. We will help you find a solution that best fits your needs and protects your future.