23rd September 2014

How do I protect my business in a divorce

Divorce will certainly have an impact upon your business. A business will be considered as an asset alongside the matrimonial home, savings and pensions. The Court will consider all the family circumstances when determining a financial settlement and will look at how much the business is worth and what income it can produce. The business may be valued as part of the process by an expert. Judges often look at liquidity within the business and whether that can be paid out to meet housing needs of the family.

Specialist legal advice should always be obtained from the outset. A business owner who moves assets or shareholdings to avoid future claims on divorce would be heavily criticised. The Court can also set aside transactions which are specifically designed to do this.
There are a number of methods to try and protect your business. A pre-nuptial agreement can assist to limit claims against a business in the event of divorce. This may not be the most romantic way to start your married life, but can be very helpful in setting financial expectations. It is however important that the pre-nuptial agreement is prepared correctly. To be effective, both parties should have separate legal advice and each must provide full financial disclosure. The agreement must also be fair in meeting the needs of each spouse in the event of divorce. A post-nuptial agreement can also be prepared where the couple are already married with the same aim.

If a pre or post-nuptial agreement has not been prepared by the time of the divorce, it can help if the business assets have been kept separate to private assets, and if the ownership of the business is shared with outsiders rather than owned 100% by the spouse. There is also a balance to be achieved in involving your spouse in the business to take the benefit of tax reliefs against the risk that they could claim their involvement has contributed to the success of the business.

Various practical solutions can also be considered to minimise the impact of a divorce on the business. There may be liquid assets such as bank accounts or property which can be used to raise funds without damaging the business. It may also be possible to transfer to the spouse other assets which fall outside of the business, for example a larger share of the matrimonial home.  

At Cartwright King we have experience in dealing with divorces involving business assets and looking at how to protect those business interests both prior to and during the marriage. For further information or advice please contact our specialist family team on 0845 894 1622 or email

For further information please get in touch with our dedicated team.

You can always call us on 0845 894 1622 or email on


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