A Legacy Intact: safeguarding your family business in the event of divorce - Book - Page 45
To provide protections, spouses should
generally not become shareholders in the
company and should not be remunerated
F O R M A N Y FA M I LY B U S I N E S S E S I T ’ S
NATURAL TH AT SH AREHOLDERS’ SPOUSES
P L A Y S O M E R O L E I N T H E C O M P A N Y.
U N F O R T U N A T E LY, W H E N A M A R R I A G E
BREAKS DOWN THIS MEANS THERE ARE
ISSUES TO CONSIDER AS TO WHETHER A
S P O U S E H A S B E E N FA I R LY R E M U N E R AT E D ,
AND HOW THEIR EARNING POTENTIAL WILL
BE IMPACTED IF THEIR EMPLOYMENT ENDS
WITH THE REL ATIONSHIP
by way of dividends. However, it is not
Some protection can be provided if
uncommon for spouses to be put on
such
the payroll of a family business and/
by ensuring that they are formally
or to fulfil a role as an employee of the
employed and are paid a salary/bonus
company. If someone’s spouse became
directly commensurate to their work.
involved in a family-owned business that
It might be considered appropriate for
had been in existence for generations,
them to receive a bonus for particularly
this could create a potentially difficult
successful contributions so that they
position
breaks
have been recompensed appropriately
down. The spouse might argue that
at the time, rather than leaving them
their
had
feeling that they have not been rewarded
or
which might provoke them to seek to
preservation of the family’s wealth.
recoup this in any financial remedy
Therefore, the easiest way to approach
proceedings.
if
efforts
contributed
the
in
to
relationship
the
the
business
generation
this is to prevent any involvement of
partners/spouses
from
the
outset.
However, this may be considered to
be
A LEGACY INTACT - EXPOSURE
too
defensive
and
impractical.
45
individuals
become
involved
