When a family business is involved in divorce proceedings, a family court will continue to manage the financial settlement. Not all divorce lawyers are able to act for you in this area so it is important you check when looking for legal guidance.
- Protecting your business – Protecting your business requires careful, planned advice. A family court will want understand the value of the business, and this can be difficult to assess with conflicting ideas about the business plans. It is therefore important to get the right legal advice to help present a solid business case when needed.
- Areas to consider:
- If you have a nuptial agreement in place
- If your business assets are independent from your private
- If your spouse is involved and has contributed to the success
- If others are involved in the partnership
- Claiming against the business – It may feel as though you do not know enough to claim, particularly with the existing pressure of a divorce, but a good lawyer will identify all the information you need. Whether you want to stay involved as an owner, wish to receive an income stream, or if you want to leave entirely. We will help identify the options available and include this within your settlement.
All property owned by you and your spouse before or during your marriage will be included within any financial settlement.
- Home owner
- If one partner is the named owner of the property you will need to take steps to ensure they do not sell it without your consent.
- If the mortgage is in both your names, then you are both liable to pay as “joint and several liability”. If one person doesn’t pay, the lender can request their spouse to pay the full amount.
- If the mortgage is in one persons name then they are solely liable to pay.
- If both partners are named on the tenancy agreement then they are jointly and solely liable for the rent. A landlord can request you to pay the full amount if your partner stops.
- If the tenancy agreement is not in your name then your spouse will be liable to pay the rent. If this isn’t paid the landlord can request eviction.
If assets are tied up in a trust it can be particularly difficult to settle. We can advise both trustees and beneficiaries to protect their interests. Offshore trusts can be complex and need to be identified as early as possible as to whether English laws are enforceable.
- Protecting a trust
- Avoid creating a trust at the time of marriage
- Include plans within a pre or post-nuptial agreement
- Ensure the beneficiary has no fixed interest or control over the trustee(s)
- If any financial distribution is needed do so as a formal loan
- Settlors should exclude themselves and their spouse as beneficiaries
- Any communication is likely to be scrutinised. Emails or letters should be worded carefully and regularly reviewed
Our family team work closely with our tax and trust advisors to ensure the best advice is available. If you have any other dispute relating to a trust, trustee, beneficiary or settlor then our contentious trust and tax team are available.