How Can Collaborative Divorce Help You Deal With the Family Business?
Family businesses form the foundation of America’s economy. Whether you’re running a small shop or a massive corporate empire, your family business will likely be a major concern as you approach the end of your marriage. Many spouses worry about how divorce will affect their business, and these concerns are well-founded. Any divorce has the potential to put enormous strain on a family business, and the financial implications can be tremendous. But how does this situation change if you choose a collaborative divorce instead of a litigated divorce?
There are many reasons why collaborative divorce may be the best option as you try to deal with a family business while your marriage ends. This option generally provides spouses with a greater degree of flexibility, control, and freedom. In contrast, you put all decision-making authority in the hands of a judge during a divorce trial. These judges may not have the necessary business experience to make effective decisions on your behalf, and they may force you to do things that can be incredibly detrimental to your business.
Suppose you would like to explore the benefits of collaborative divorce in the context of a family business. In that case, your best bet is to get in touch with an experienced family law attorney in North Carolina. Choose an attorney who specifically has experience with collaborative divorce, and you can learn all about the benefits of this process during an initial consultation. If you would like to proceed, we can help you handle this matter by negotiating on your behalf during the collaborative divorce process.The Biggest Concern Divorcing Spouses Have When It Comes to Family Businesses
The biggest concern that most divorcing spouses have about their business is that it will fail due to the financial pressures brought about by the end of their marriage. In a typical, litigated divorce, the business is often divided roughly in half, destroying all of the value of the business and sending it into a downward spiral. The true value of a company is not its current value, but rather its potential to earn income for many years into the future. If left to proceed untouched, a family business could provide a considerable amount of financial support to the spouses and the children for the foreseeable future.
These potential future earnings are much more substantial than a one-time, 50% payout which kills the business. Of course, there will likely be much debate over the true value of a business during a divorce, as both spouses will probably hire their own expert valuators who will inevitably come to different conclusions. Note that these concerns only apply to spouses that have acquired or formed a business during the marriage. If a spouse created a business prior to the marriage, then it is considered separate property and cannot be divided.Why a Collaborative Divorce is More Effective in this Scenario
The collaborative divorce process can address many of these concerns. First of all, spouses can hire a single, neutral chartered business valuator who can evaluate the business in an unbiased and fair manner. Not only is this a more equitable solution, but it also costs less.
But perhaps more importantly, a collaborative divorce can help you avoid “killing” the business due to the normal equitable distribution process. If both spouses want the company to survive and continue providing for the family, collaborative divorce gives them enough flexibility and control to achieve this goal.
For example, one spouse may be particularly skilled at leading the company. Therefore, it is imperative that this spouse remains involved in the company, preferably in a leadership position. The other spouse may also wish to remain as a co-owner. If both spouses do not wish to continue interacting with each other on a daily basis through their involvement with the business, various other options are possible. For example, one spouse might “buy out” the other, compensating them for their interest in the business. Spouses can also trade assets. For example, one spouse might keep complete control of the company while the other spouse keeps the family home. With a collaborative divorce, all of these options are on the table, and spouses can decide on the path that best serves their unique needs.Enlist the Help of a Qualified Attorney Today
If you have been searching for an experienced divorce attorney in North Carolina, look no further than Arnold & Smith, PLLC. We know that many enterprising spouses in the Tar Heel State may have successful family businesses, and we appreciate the need to keep these businesses strong as you handle your divorce. Collaborative divorce can be effective in this type of situation, and we can guide you toward a positive legal outcome. Book your consultation today, and we can explore the various options for handling your family business as your marriage comes to an end.