How to Navigate Divorce When You Own a Family Business

Divorce can be very complex; there may be a myriad of issues to consider, from Alimony to Child Custody to Equitable Distribution. But a complex divorce can easily become far more complex if one of the divorcing spouses owns, or is part of, a family business.

How do you successfully navigate divorce when you own a family business? What are the steps you can take?

• Be honest— and compassionate— with yourself about what this is going to entail. If you’ve built a business with a family member, you’ve sacrificed and put in the proverbial blood, sweat, and tears —and, of course, time and money. You are probably worried about the business being a casualty of your forthcoming divorce (let’s face it: running a family business is never easy, even in the best of times). If the person you’ve started the business with is your spouse from whom you’re now divorcing, the situation is even more fraught. Be honest with yourself about what you want, and what you can do to get there.
• Consult with an O’Cathain Law Group Family Law attorney. It’s never advisable to represent yourself in a divorce, because the paperwork, the byzantine rules of the court and the emotions all combine to overwhelm you, but with a family business in the mix an experienced divorce lawyer is a must. Our Family Law Department is headed by Francesca O’Cathain, Esq., who has years of practice and has handled family business divorce cases before, and your legal team will include a dedicated family law paralegal to work with you.

How Can I Prepare For My Consultation?

• Bring as many financial records related to the family business as you can. This may encompass tax returns, vendor invoices, payroll, profits and losses— anything that relates to dollars and cents. Don’t worry if you don’t have these family business financial records as organized as you’d like them to be; your dedicated family law paralegal will work with you over time to organize your financial statements.
• Bring documentation on the history of the family business itself. This many include incorporation papers, a history of a limited liability corporation, or even just notes and documents you have from the founding. These documents will be used to tell the story of the family business.

What May I Expect For My Family Business During The Divorce Process?

• We’ll work with a forensic accountant to discover the true value of the business. Depending upon who put what into the business— time, money— and what the desired outcome is, we may be able to come to a settlement regarding the family business with your spouse and their counsel. If no settlement looks possible, the court may decide what’s fair and just. If you helped build the family business during the marriage— or if you built it together as spouses— the court may view the family business as joint marital property, subject to Equitable Distribution.

• One of the best things you can do is be honest with yourself and your family law attorney about what matters most to you: are you hoping to protect and safeguard your family business? Are you willing to trade something valuable— say, property, such as the marital home or a summer home— in exchange for part of your spouse’s interest in the family business? Are you looking to cash out and exit the family business? Knowing what the desired endgame is can make the divorce process easier to navigate with a family business.

We understand this is more than a business to you, and true to our firm’s motto, we’re here to help you Move Forward. Reach out today to schedule a consultation and protect all your hard work during your divorce.