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Without preparation beforehand, you and your business could be in serious trouble if you
divorce. You could lose a lot of money and possibly even control of the business you have spent your life building by failing to take a few precautionary steps. As well, sensitive financial information about your business could be made public, and available to your competitors.
How To Protect Your Business Before Your Divorce
KT owned a successful dairy, which he had started, that now sold products across the country. Just before his wife started divorce proceedings, he quickly transferred control of the dairy to two of his sons, so that his wife would not have a claim on the dairy. The trial judge was not impressed by KTís tactic, ordered the sons to transfer the dairy back to KT and ordered KT to transfer 51% of the dairy to his wife.
JS owned a thriving factory. During the divorce proceedings, it became clear to JS that he would lose half of his factory to his wife. So, he looted the company: he took all the cash, equipment and files out of the factory. He had the board of directors resign so that the company could not function. However, in the end, JS still lost half of the company to his wife and had to do a stint in jail for looting the company.
Both of the above scenarios could have been avoided by divorce planning beforehand. The time to start planning is now.
When a couple divorces, the law requires that their net family properties be equalized. If your business is successful, it is likely to be your main asset. If you do not have sufficient assets other than your business with which to make an equalization payment, your spouse may be entitled to an interest in your business. As well, your spouse would be entitled to detailed financial information about your business, which could become part of the court file and available to the public, including your competitors.
Click here to find out 5 ways by which an experienced family lawyer can help you