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Divorce may entitle spouse to share in packaging firm’s value
A business owner fears he could lose his packaging company in a divorce after 20 years of marriage. A family law barrister explains that a spouse may have a claim on the business’s value even if they did not work in it, because parenting and household contributions are also recognised.
The company was started before the marriage and is now estimated by the owner’s accountant to be worth about $2 million, with 14 employees. A settlement could allow him to keep the business while his wife receives more of other assets, but each case differs. The advice is to obtain an independent valuation and legal guidance; reported legal fees range from a few thousand dollars to more than $700,000.
In short
- A divorce settlement may include the value of a business.
- Parenting and household work can count as contributions.
- Independent valuations and negotiation may help protect the company.
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The case for
A spouse may reasonably argue that a long marriage is a shared economic partnership: unpaid parenting and household work can enable the other spouse to build and run a business, even without direct involvement in it. Sharing some of the company’s value can recognise those contributions and help ensure a fair settlement.
The case against
The owner may reasonably argue that the company was founded before the marriage and that its growth, risks and value are tied to his work and investment. A large claim could threaten a viable employer and disrupt the livelihoods of its 14 staff; a settlement that lets him retain the business while dividing other assets may better protect both parties’ interests.
Explained simply
A divorce can involve dividing the couple’s finances, including the value of a business owned by one spouse. A company’s value may be considered even if it was set up before the marriage and the other spouse never worked there.
Courts may take account of contributions to family life, such as raising children and managing the household, as well as work that brought in income. The outcome depends on the couple’s circumstances, and business ownership does not by itself determine how assets will be divided.
A business can be valued by an independent expert, and a settlement may involve one spouse keeping the company while the other receives a greater share of other assets. Legal advice can help explain the options and likely costs.
Read the full article at the source →
Originally published by Daily Mail as “My business is worth $2 million and my wife wants her share in our divorce. Will I lose everything I’ve worked for?”.