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For business owners, there are few worse scenarios imaginable than a divorce. Going through the process of a separation and divorce is difficult enough on its own, but the added stress of protecting or dividing up a business can make this much more difficult. When a business owner goes through a divorce, the business itself comes under scrutiny.
It stops being a day job and becomes an asset. Suddenly, there are more eyes than usual on your business affairs, digging around to find out how much money the business makes, if it’s making enough money and if there are streamlining processes that would allow the business to make more money. The reason? As soon as divorce proceedings start, the business becomes an asset. Even the most amicable divorce can quickly become ugly and drawn out, so it makes sense to be one step ahead in order to protect the business you have worked hard to build.
In order to protect your business and prevent it from folding in the process of a divorce, it’s important to get your case in order early on. By presenting your case to the other side, this will allow you to guide the process rather than being in a position of reacting and defending. Getting expert advice as soon as possible is essential, as each case will be different. In order to guide you, consider these wider principles in order to protect your business.
When did you start the business?
If the business was founded before you were married, you may be able to make the case that it is a non matrimonial asset. The mistake many business owners then make is to bring their spouses on board as directors after they are married, which makes the process of determining their contribution all the more difficult. While bringing your spouse on board in a business isn’t a mistake in itself, it can make it more difficult to manage during divorce.
Is there a co-owner?
If you are the sole owner of a business, then the courts will treat the business very different than if there are multiple owners. If you have a business partner, this will be invaluable to ensuring your business isn’t considered as a whole in divorce proceedings.
Is your business in your will?
If you plan to pass the business on to your children when you retire, then this will be treated very different by the courts, and potentially by your spouse. If you’re unsure if your will is up-to-date, there are probate solicitors who will be able to assist you.
Are you business and private assets mixed?
Mixing your private and business assets should be avoided at all costs. This is something that may not be preventable at the later stages, so it makes good business sense to make this a rule from the beginning. If your family home has been used to secure funding for the business, this might prove problematic during a divorce.
Be clear about your spouse’s contribution
If your spouse contributed to the business in the earlier days, be clear and honest about their contribution early on. If their claim is over exaggerated, then your clear and concise interpretation of their contribution will help to provide context.
Divorcing your partner is always an arduous and knotty process, not to mention life altering. It’s definitely exacerbated when you’re having to go through the whole situation overseas; with there being a surge in couples emigrating to build a life together overseas, the stress of moving together potentially invites more couples wanting to divorce – which in turns brings further ramifications for divorce proceedings.
Approach each country differently
It’s more complicated overseas because many countries have opposing legal approaches and conditions, which you might not be aware of in the United States. Many countries in Europe such as Spain prefer a clean cut financial break between spouses, which could mean putting up your family home on the housing market and splitting the value. In regards to the UK, divorce specialists hope to entice couples with an ongoing financial relationship utilizing the means of alimony (spousal support), or child support.
Divorce proceedings are in fact most comparable in the United Kingdom to the United States, which is good news given that a lot of us live and work in the UK; there is also the additional bonus that court documents won’t have to be translated. Nevertheless, if you wish to remain at your home in the UK, you might need to take a look at your visa status, if it was conditional upon your marriage. We recommend you checking out Spouse Visa UK – with one of these (which will you’ll need to obtain before moving to the UK), you’ll be able to remain in the country as a person with a settled status or an unmarried partner visa. Regarding the former, which is also known as Indefinite Leave to Remain (ILR), indicates that you have the right to settle here permanently.
Ensure your divorce is recognized in the US
It’s crucial that your divorce is legitimate in the United States as well. The United States currently has no international treaties with other countries that pertain to US citizen divorces being enacted outside of US jurisdiction, which means that you might have to undergo some additional steps for it to get recognized back at home. However, the likelihood is that due to comity – the practice that if both spouses were aware of the proceedings and had the chance to state their case – the divorce decree will be acknowledged in the US.
Moreover, if you begin divorce proceedings in one country, you can’t change halfway through the process to another legal system in another country; despite this being an uncommon situation, this is a common reason as to why the United States might not consider your divorce, due to the fact that they believe that one party potentially wasn’t domiciled in the country where the process initially took place.
Finally, to fully confirm that your divorce has been authenticated back at home in the US – whilst still wanting to still remain overseas – you will require a certified copy of your foreign marriage and divorce certificates. After you have these, the next step is to request your local embassy or consulate to legalize the document.