There are many factors to consider as a business owner striving for success, but your personal life can quickly undo years of hard work. One of the most difficult times in anyone’s life is a divorce, and for those who own a business, the financial impact can be catastrophic. Here’s how to make sure that doesn’t happen.
Although the divorce rate in the UK has reduced over last the last couple of years, it’s still an unfortunate fact that “til’ death do us part” is a phrase that’s sometimes worth only the paper it’s written on. Anyone who has been through a divorce will tell you it’s not pleasant at all, and one of the aspects that causes the most amount of stress is money. If you’re a business owner going through a divorce, the financial impact you experience can cause your company problems.
In this article, we’ll highlight some of the things business owners can do to prevent or contain a heavy financial blow during a divorce.
Preparing yourself for a divorce is the first and most vital step. Of course, you’ll have a divorce solicitor in your corner to take care of legal issues and paperwork, but having everything in order before you even hire them will save you a lot of resources. There are many additional variables to consider when a company is involved. This means you need to gather any necessary documents that relate to your business, such as tax returns, and leave no stone unturned.
With the right preparation, you’ll be able to establish a clearer idea of what your partner is entitled to and how much of a financial impact the divorce will have. This will prevent any nasty surprises later on that could affect your financial stability.
Prenuptial & Postnuptial Agreements
A prenuptial agreement is something that all business owners should keep in mind. This will allow you and your partner to divide your assets before your marriage and establish who is entitled to what. This will prevent a great deal of stress during the divorce, as it makes the process less of a battle to get your fair share. If you’re already married, it’s obviously too late for this, but it’s still something you can keep in mind if you decide to remarry.
While most people will have heard of a ‘prenup’, a postnuptial agreement is something that everyone is aware of. This allows you to carry out the action of a prenup after you are already married. This is especially beneficial if your business was established when you were already married, as your partner could be entitled to a share of your company. A family lawyer will help you to put this in place and prevent many of the financial issues during divorce.
Hire a Reputable and Experienced Divorce Solicitor
This goes without saying, but your choice of divorce solicitor is imperative. You wouldn’t do business with someone who lacks the quality to benefit your company, so why put your business’ future in the hands of a family lawyer who shares a similar issue? Make sure to shop around for reputable, experienced divorce solicitors, for which consultations will prove to be valuable to find a solicitor you’re able to rely on.
A divorce solicitor who has worked with company owners before will benefit you massively when it comes to advising for the present and future in regards to business. Although a high-calibre family lawyer might cost more, this is an investment that’s often worth its weight in gold in the long run. With this being said, taking some time to research a reputable family law firm in your area is vital. For example, if you are living in West Yorkshire, you can take a look at the website for Eatons to learn more about some of the different family law services that family lawyers can provide.
Fund for Emergencies
Saving for a rainy day is always a good idea, but saving for the day you get divorced is crucial. The worst thing for business owners during this time is having to use company money to cover the various costs of divorce. Depending on your financial situation, this may just be a bump in the road that hinders your progress, but for small businesses, it puts them in a position that’s impossible to come back from, often shutting up shop for good.
As soon as the word ‘divorce’ is mentioned, or if you have sensed that your marriage will be ending soon, it’s time to put aside some money for an emergency fund. This obviously needs to be in a bank account under your name. Otherwise, it becomes a split pot, which defeats the entire purpose. With this fund, you business won’t have to provide the money for divorce solicitor fees and other costs.