Divorcing couples who own a business together run into a unique set of challenges. Negotiating the split inevitably takes time and money, even if the separation is amicable.
Various considerations motivate some couples to choose mediation over the hassle and expense of litigation.
Why business owners face additional issues
Disagreements may arise about what portion of the business is a marital asset. If one spouse owned the company before the marriage, the individual may argue that the pair should not include it in the property division.
Another issue that often comes up is income verification, which can be especially tricky for business owners depending on the business entity and other considerations. Verifying assets and value is a delicate process, even without the complications of divorce.
How mediation helps business owners
Mediation can be less expensive because the process is more efficient, saving couples money and time. Additionally, mediation is confidential, whereas court proceedings are public records. This fact can be important for business owners who want to keep the details of their divorce and the business out of the public eye. Even when a split is contentious and each person wants to fight for as much as possible, public perception can harm the company’s value, alter incomes and lead to alimony modification.
Mediation allows the spouses to control the outcome of the split. A court case puts both individuals at the judge’s mercy. Mediation provides a way to negotiate an agreement that works for both parties.
Mediation can also preserve family relationships. If the couple has children together or wishes to continue working together after the split, keeping the peace is crucial.
Divorce always creates some struggles, but the process does not have to be devastating. Separating couples who have a business can use mediation to smooth things out.