Divorce and the Family Business
If you are part of a family business you know how important it is to stop personal emotions affecting the company.
Divorce or separation is often a period of extreme stress which can spill over into your business with disastrous affects. A traditional divorce means a court setting where the Judge and the lawyers work on issues that the Courts deem to be important but are not necessarily helpful to your business.
However there is a new way of divorcing that avoids some of these problems. The Collaborative Family Practice approach is far less acrimonious and more importantly it can make the decisions regarding the financial consequences of your relationship breakdown including issues affecting your family business.
The Collaborative process uses specially trained lawyers who, with their clients and each other, work in a series of 4-way meetings to reach a negotiated settlement. This four way discussion creates more imaginative and tailor-made financial solutions to your specific problems. The lawyers representing both parties must both be trained collaborative lawyers.
Experts such as accountants and pension specialists can be brought into the process as financial ‘neutrals’ ie. not acting for one or other of you, but to assist everyone in the negotiation. Using a financial neutral can help set up the most tax efficient way of releasing capital and they can also resolve other business issues that could inhibit the growth of the business. Your bankers will also be happier as they can be part of the solution, rather than concentrating on the negative impact of the divorce on the business.
Given the complex interrelationships in family businesses, Collaborative Family Practice is an ideal way to move forward without the hostility and bitterness often found in a traditional divorce. Other family members may contribute to the problem-solving rather than taking sides, which means that the valued contributions of family members can continue to benefit the business.
Collaborative Family Practice is fairly new to England and started four years ago. However, it is very common in North America and increasingly popular in other parts of Europe. In the South West there are an increasing number of trained collaborative family practitioners.
Collaborative Family Practice is also a positive tool at the start of new relationships. This really is the time to set out an agreement detailing what should happen if the relationship breaks down. It sounds unromantic and adversarial but using collaborative lawyers means the atmosphere is positive whilst everyone’s rights are protected.
Thursday, 25 October 2007
