By Marguerite (Maggie) Smith, author of The New Standard Marriage/Divorce Protecting Closely Held Businesses. Maggie can be contacted at firstname.lastname@example.org
Business assets can include a number of things, for example, stock in a publicly -traded business, or shares in a closely held business or a retirement plan. The most complex of these areas is the closely held business. I shall address that in this article.
The Closely Held Business:
This is a very specialized area. You need to have an attorney who is knowledgeable about business as well as the intricate law on business assets in divorce. Most family law attorneys do not fit the bill. It is not enough to be able to read a financial document. Your attorney should understand the complexities of running a business and be able to spot legal and practical issues that can assist the client.
For the actively -involved business spouse:
The business can be badly affected by litigation during a divorce process. Some nightmare stories include restraining orders holding up business activities; numerous depositions; unnecessary and unduly burdensome discovery of information; appointment of a badly selected expert to conduct or monitor certain business activities; interference of the spouse after divorce when the spouse was not bought out during the process. It goes on. It is advisable to hire an attorney who is knowledgeable in this area, can address your concerns to the Court and suggest to you, opposing counsel and the Court strategies to address the concerns of all and protect the business. In addition, a knowledgeable attorney should be able to put forward creative solutions for keeping the business intact on the other side of divorce with the non -active spouse out of the business. The latter takes creative thinking typically if a settlement is to be obtained during negotiation or mediation, for a win-win scenario for both parties.
For the non- business spouse:
The family business is often the most significant asset in a divorce. It is unwise to kill the goose that lays the golden egg. However, it is common for non -business spouses to be suspicious about the business activities of the other spouse. Sometimes this is justified but most often the non- business spouse does not know and can overreact due to fear. This is where a knowledgeable attorney can be of help. Rather than play into the fears of the client which often leads to considerable litigation, disruption to the business and expense, it is generally more helpful to calmly suggest ways to obtain the necessary protection and then obtain the necessary information in a manner that is effective but least disruptive to the business and expensive to the client.
A knowledgeable attorney who concentrates in the area of business assets can assist in the formulation of a plan to obtain the best deal for you with regard to an over all asset distribution which might include you being “bought out” of your interest at the divorce or later or keeping your interest in the business asset for the longer or shorter term.