Mixing Business With Pleasure: What Happens When Co-Owners Divorce?
It happens. Even with divorce rates declining, the percentage of marriages that go through a divorce is 40% to 50%. With so many marriages going belly up, it’s vital that you are aware of the divorce process, beginning with the number one. A good divorce lawyer will help you keep your shirt on your back.
One of the best tips for hiring a divorce lawyer is don’t pick the first one you find. Interview three to four lawyers using questions that unearth their experience in divorce cases. Read up on divorce law yourself. For example, can a no fault divorce be contested, or can both husband and wife file for divorce?
The answer to the first is generally no. The second can be done, and sometimes that happens because the couple is in agreement about all matters regarding the divorce, making it a no fault divorce. Can you get married without a divorce? The answer is no, because that is considered bigamy, a federal crime.
Another often asked question is if you can divorce before 30 days of marriage elapse. No, in most states, you have to stay separated for a year.
In the United States, 3.7 million small businesses are owned by couples that are married. This often brings up the question of what happens if the relationship ends in divorce? Do these former spouses remain business partners after filing for divorce?
When a married couple contacts their family lawyer to complete an application for separation the business may become conflicted. The clientele of the business may wonder who will get “custody” of them following the divorce. Will the business continue to operate business as usual following the divorce? Or will one partner sell out the other or completely sell the business to a new owner.
Some couples ask their family lawyer, can I file for divorce at the courthouse? Is the divorce going to become public knowledge, thereby affecting the business negatively? Many business relationships are much healthier in the boardroom than in the bedroom. For this reason when a couple who are co-owners in a business separate the business actually becomes more profitable.
These couples seeking to end their marriage often wonder, can I handle my own divorce? The answer is yes. They must focus on what each partner brings to the business.
When personal ties are severed, a clear line is drawn to define the new professional relationship. Once this is done, divorcing business partners can work together successfully. But only after they learn how to separate the once personal relationship and become a strictly business partnership.
New U.S. Census data shows mixing business with pleasure is not as uncommon as you might think. Married couples co-own at least 3.7 million small businesses in the U.S., which raises an obvious and important question: is this wise? “Most of the time, when the love dies, the business relationship ends, too,” NPR reported Thursday. “When spouses who happen to be business partners divorce, the drama and emotion of the situation can sometimes put the business at risk,” CNN continues.
There are exceptions to that rule, however. Rhonda Sanderson and her ex-husband, John Amato III, teamed up again — as business partners — years after their divorce. To this day, they maintain a fruitful business relationship. “We actually knew that we were not suited to each other at all in any other way, but the fact is that he has this brilliant marketing mind, and all we ever talked about on dates were business ideas,” Sanderson told NPR.
CNN counsels couples on ways to share similar success. The key to a thriving, co-owned business after divorce, CNN continues, is compartmentalizing. Some ex-spouses “are able to make sharp distinctions between their personal and their professional lives,” according to NPR. Experts also warn against being unrealistic. Honestly consider the promise and/or limitations of an ongoing business relationship, and do not let marital troubles interfere with the business.
If couples cannot practically continue working as business partners, CNN recommends hiring an independent appraiser. An independent appraiser can fairly determine valuation, and help the couple evenly distribute assets.