A Legacy Intact: safeguarding your family business in the event of divorce - Book - Page 51
T H E I M PA C T O F A S I B L I N G ’ S D I V O R C E R I P P L E S
A C R O S S T H E W H O L E F A M I LY
FA C T S : F o u r s i b l i n g s o w n t h e i r f a m i l y b u s i n e s s a s e q u a l s h a r e holders after it was passed down to them from their parents who
had established the business. One of the siblings has become
embroiled in a divorce and their spouse appears to be determined
to litigate the matter through the Courts.
HERE, OUR EXPERT TEAM OFFERS
COMMENTARY ON SOME OF THE
C H A L L E N G E S W E M O S T F R E Q U E N T LY
S E E FA C I N G FA M I LY B U S I N E S S E S .
OUR VIEW: Sadly, the reality is that in this scenario, the financial
ramifications of the divorce for the siblings’ business could be
extensive. More than that, the family should be aware there would
also be the risk of privacy concerns if the matter is not resolved
outside of Court.
Whilst the English Family Court would have regard to the
interests of the three siblings in the business, that would not
necessarily prevent the Court from making orders in favour of the
spouse to achieve fairness. The Court would seek to do everything
in its power to avoid a transfer of shares to the spouse given it is
completely counterintuitive to a clean break – it would result in
an ongoing financial tie, not only between the divorcing spouses,
b u t a l s o b e t w e e n t h e s i b l i n g s a n d t h e i r e x - s i s t e r i n l a w.
H o w e v e r, i f t h i s i s t h e o n l y w a y t o a c h i e v e f a i r n e s s , t h e n i t i s n o t
outside the ambit of possibility. The best solution is one that
requires forward planning: a nuptial agreement would have been
beneficial in seeking to ring-fence the shares from forming part
of the matrimonial pot and would have included provisions about
using alternative forms of resolving any disputes outside of the
Court sphere.
A LEGACY INTACT
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