20 July, 2015
Recent statistics show that there are now approximately 5 million divorced people in the UK, the highest number in Europe and 4 out of 10 married couples will eventually separate……it could be you!
It is unlikely that you were thinking about your business assets when you recited your Wedding Vows, but your spouse will certainly be thinking about those assets should you divorce. There is now hardly any distinction between the breadwinner and the homemaker, both are considered to have made similar contributions to the family wealth.
The length of the marriage will determine the scale of the settlement, and no longer can an entrepreneur defend a claim by saying if their spouse took the assets out of the business, the business could "go bust." In many cases, entrepreneurs should be able to re-finance to keep their business afloat, although in difficult economic conditions it could prove tougher to secure that lending.
When you divorce, your business assets are up for grabs as much as your home, car and holiday cottage. You might expect this if you have both played an equal part in the business, but the principal is the same if your spouse never worked.
Many entrepreneurs give the impression that their business is much more successful than it really is, or has much lower borrowing. Spouses are understandably suspicious when they are suddenly told the business is struggling financially, and this can lead to nasty disputes. A common sticking point is how to value the business, valuers can give very different figures and this in its self can be a very costly exercise.
With the knowledge therefore that your spouse may never have even set foot on your business premises, but on divorce could claim a part of its assets, a business owner should consider a number of options:
Dawn Baker is a Partner in the Family Department at our Preston office and can be contacted on 01772 220022 or Dawn Baker