How to divorce-proof your business

The starting point in divorce cases is a 50:50 split of a couple’s assets, including business assets, meaning a spouse of a business owner could be entitled to as much as half of the value of the company.

While entrepreneurs are so focused on building up the success of their business, many business owners fail to consider the need for a contingency plan to protect the firm should they divorce from their spouse.

Here, family law expert Janine Hutson explores what can be done to protect the success of your business should you decide to divorce in the future.

Pre-nuptial agreements

If you discuss your intentions before marriage and record what will happen to your business if you divorce, you can reduce the risk of your former spouse making a successful legal claim in relation to the business.

Entering into a pre-nuptial agreement before marriage can help protect a business. Although these agreements are not automatically binding in the family courts in England and Wales, if they are drafted and negotiated carefully by a specialist family law solicitor it is possible to create a binding agreement.

This may be particularly important if you built up your business prior to meeting your spouse, or if you have been married previously and have children who you want to inherit the business in future.

Post-nuptial agreements

If you are already married you can also enter into an agreement which sets out how your business would be dealt with in the event of a divorce.

It may not feel particularly romantic to discuss a post-nuptial agreement with your spouse but these agreements give both parties certainty for the future and can avoid the expense and anxiety of legal proceedings later on.

For more information on protecting your business on divorce or to discuss any aspect of family law please contact Janine Hutson on 01772 258321.