When two married people in California decide to split up, the impact can have long-term financial repercussions. Especially complicated is when the two individuals own a business together. A couple of tips may help married individuals to address their shared business in a manner that is fair and mutually beneficial in the event that they get divorced and have to deal with property division.
First, it helps for a wife and husband team to sign what’s known as a shareholders agreement, which will highlight guidelines of what should happen if one of the partners decides to sell in a divorce. Although unrelated business partners often sign this type of agreement, it is rare for married couples to do so, but it is wise to do this. A strong agreement explains how the two will split their business if one chooses to leave and puts the business’ interests above the interests of each individual shareholder.
Second, it can be helpful to talk to one’s employees to find out how they feel as a result of the decision of one business partner’s decision to leave due to divorce. If employees pick sides, this can cause the business to rapidly fall apart. It can be helpful for the divorcing pair to agree on what information to share with workers, to reassure them that the company won’t be negatively impacted by the divorce.
Getting divorced and having to deal with asset and property division can be unsettling. Even if a divorcing couple never signed a shareholder’s agreement prior to their divorce, they can still try to resolve their issues on their own through negotiation or mediation. An applied understanding of related divorce laws may help people to make educated decisions that can benefit them in the long run financially in California.
Source: wealthmanagement.com, “Family Business and Divorce”, Bruce Provda, Dec. 15, 2014