How to Navigate a Divorce When You Own a Business
Going through a divorce is a mental battle for everyone. But when you both run a business together and have employees relying on you, the stress multiplies two-fold.
Imagine — your soon-to-be ex-spouse wanting a bigger share than you both agreed on could get defensive. There might be outbreaks and lashing out of how the business could’ve been better handled. All these nasty and resentful remarks add up to an already turbulent time in both of your lives.
If you find yourself in this situation, it’s good to have competent and caring lawyers by your side, like Unified Lawyers. For any immediate advice, here are some ways to navigate through the turbulent divorce while balancing a running business.
1. Seek Legal Advice
Every marriage, situation, and business situation is different. There is no single standardized way to navigate a divorce that can be packed out and shipped to the nearly 50,000 divorces that occur in Australia. On top of that, having your business fall apart because of the severity of the relationship strain can worsen your financial situation too.
That’s why it’s incredibly important to consult family lawyers and seek legal advice. Family lawyers do a lot of the gruntwork to manage the strains among you and your spouse. They manage legal matters between family members — like the division of family property, child custody, alimony, and support. They also draft litigation-related matters and prenuptial and postnuptial agreements.
2. Business Valuation
The Family Court may appoint an independent valuer to gauge your business’s net worth. This is so that you’ll have an easier time dividing the assets.
The independent valuer’s job is to determine the value of your business, done without partiality or bias. They also play a large role in the courtroom, acting as an expert witness with more information that can serve the judge and jury in this divorce case.
A common misconception is that the value of the business is equal to its selling price. But in truth, the value is calculated by the business’s monetary value to the owner. It also includes the benefits and profits realized should they have maintained or kept the enterprise running smoothly.
The factors considered by the independent valuer in determining the value of the business consist of the following:
- Stability of cash flow
- Projection of future cash flow
- The continuation or halt of business operations
- Profit estimate if the business was sold/acquired
The job of the independent valuer entails establishing each party’s entitlements for a fair division of assets.
3. Redefine your relationship
Beyond the legal nuances, you and your spouse should seek to clearly define your roles in your relationship. Redefining your relationship will create a better working relationship as opposed to leaving it unchecked and unaccounted for.
By redefining your relationship, you will lessen the chances of micromanagement and overstepping another person’s role. This is not important from just a relationship standpoint, but also the business and how you collaborate with them and your team. In most cases, these definitions are in tune with what you or your spouse brings to the table.
4. Get some space
The mental anguish and exhaustion of a divorce is never a non-stressor. According to Dartmouth, divorce is the second leading stressor in the Life Change Scale Index next to the death of a spouse. The stress of a divorce can throw your entire life in disarray — and it’s completely valid to want to step away from it and tune in to yourself again.
To start, here are some ways you can practice self-care and get some much-needed space for yourself:
- Say daily positive mantras like “I am worthy of love.”
- Get support from your friends and parents
- Get in touch with your past self before the divorce
- Grieve the end of the relationship
- Explore all your options
- Travel and take your time before jumping into the next
While the divorce and logistics that go with it are excruciating now, know that time can heal things. By giving yourself time to heal and forgiving yourself, you’ll have a faster and smoother transition to the next chapter of your life instead of sulking in the past.
With a business to run, it may seem a bit more daunting trying to reconcile with finances on the line. But with the help of family lawyers, you can learn about what you can control and base your options off there.
5. Accept that your relationship has evolved
After the divorce papers are signed, that’s it. You and your ex-spouse have finally moved on from your relationship. Depending on the outcome, however, it doesn’t always have to be the end of your business. Maybe you can relocate it. You may still need them to run the business for example, and they’d think the same to you.
It can be tricky re-establishing new boundaries in the relationship. But just like most things, understand that developing an appropriate business relationship takes time to heal. Know that things aren’t going to be tidy all the time — but once you learn to accept your role in the business and relationship, you can make it work and provide for yourself and your children.
