Collaborative Family Law and Your Business
Date: NOV 18, 2014
We have all heard stories of bitter marriage break-ups and acrimonious splits that have proven detrimental to business owners.
Divorce is a difficult and painful time for anyone, but when a family business is involved, the implications are enormous. You simply cannot isolate them completely from the process, especially when both spouses are directors of the business or have legitimate claims on the business.
So how can business owners ensure that their business, which may have taken many years of hard work and dedication to build up, is not destroyed in the process? The answer may lie in the collaborative family law process.
The Collaborative Family Law Advantage
The collaborative family law process is an extremely effective method of resolving disputes when there are large property settlements or a family business involved.
The key difference is that it focuses on party-to-party negotiation, thus avoiding the intervention of a court and allowing the parties involved to retain control of the decision-making process.
In the collaborative process, the couple, their lawyers and other professional advisers work together to find a fair solution to whatever financial, business or child-related issues need to be addressed in the separation. It allows the parties involved, who know and understand their business better than any judge, to consider the implications of certain decisions and negotiate outcomes accordingly.
The collaborative process also provides an opportunity for business owners to keep the details of their settlement confidential. For many couples, maintaining their privacy by not going through the public Court system is a strong incentive to try and negotiate their own terms of settlement. Collaborative family law can utilise the expertise of lawyers and professional advisers to help facilitate a fair and reasonable outcome for both parties that remains confidential. In the majority of cases, the time and cost involved in reaching that settlement is also much less than if a dispute is referred to the Court for resolution.
How does it work?
After deciding to contract out of the court system, the couple sits down with their respective lawyers to discuss the issues involved in their dispute, then negotiate their own arrangements during face-to-face meetings. The process allows both parties to have equal say and express their own needs or requirements, as well as keeping the needs of any children paramount. If a particular issue is causing problems during the negotiations, an expert adviser can be called in to assist. This adviser is usually an accountant, counselor, psychologist or children’s specialist.
When an agreement has been reached on all of the issues, the outcome is recorded and encompassed in a legally binding and enforceable document. This legal document can take the form of a Binding Financial Agreement outlining the division of property and assets (including any decisions made with respect to the family business), a Parenting Plan relating to the children of the marriage, or an Application for Consent Orders. For business owners and operators, it is important to note that Stamp Duty exemptions and CGT rollover release will then follow from either the Binding Financial Agreement or the Consent Orders.
If you are a business owner considering separation, or would like more information on the collaborative family law process, speak to one of our experienced collaborative lawyers today.
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