Divorce in itself can already be stressful and devasting for the couples involved. About 689,308 divorces were recorded in the U.S. in 2021 alone, which means it happens to more couples than some of you think. However, when there’s business involved, the whole divorce process can feel like navigating a minefield.
For many couples who have built a company together, that business represents their shared livelihood and years of hard work. Thus, protecting those assets should be a top priority during the divorce process. This is where divorce mediation can help. With mediation, you and your soon-to-be ex-spouse work collaboratively with a neutral third party to negotiate the terms of your divorce. When handled skillfully by an experienced mediator, the process can result in a settlement that allows your business to remain viable for both parties post-divorce.
So, read on and discover how mediation can protect your business assets during divorce.
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Avoid costly litigation
Going to court over contested divorce issues like business assets can rack up huge legal bills. Plus, the whole litigation process just drags on forever, too, sometimes taking years before you get a final ruling from a judge. That’s valuable time you could have spent keeping your business up and running.
But with divorce mediation services, you and your soon-to-be ex-spouse get to sit down in a room and hammer out agreements face-to-face. All those thousands you save on legal bills can get reinvested into your company’s future rather than lining some lawyer’s pockets. Mediation lets you settle your divorce on your own terms, without all the courtroom drama.
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Maintain control of your assets
When you go to court for divorce, it’s like handing over the keys to a stranger and letting them decide what happens to your business assets. The judge gets total control over who gets what. And most of the time, they have no clue about the ins and outs of running your company like you do. But with mediation, you and your spouse stay in the driver’s seat.
According to Boston University’s 2022 research, mediated divorce settlements have an 81% satisfaction rate. So why leave your future in some judge’s hands when you can work it out with your spouse in mediation? After all, no one knows better than you two what the fairest way is to divide your business assets. And don’t worry, as the mediator is there to facilitate negotiations, not impose top-down rulings.
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Limit disruption to business operations
The adversarial nature of courtroom litigation can disrupt business operations as you battle over assets. It also exposes sensitive company information through financial disclosures and testimony.
Why take that kind of financial hit when mediation offers a private, confidential setting to work out agreements? Your employees and customers don’t need to know about your personal affairs. With mediation, it’s just you, your spouse, and a mediator figuring things out behind closed doors. Your business can hum along with minimal disruption to the bottom line.
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Explore creative solutions
Divorce judges have their hands tied by the law when it comes to dividing up your assets. They’ve got to follow the rule book to the letter. But mediators aren’t confined by all those rigid rules. Their job is to help you and your spouse brainstorm innovative ways to split things up that you’re both satisfied with.
For example, maybe you become silent partners in the business, or one buys the other out over a set period of time. So, embrace the chance to get creative and make a tailor-made agreement that protects your business. These types of win-win solutions maintain the business’s integrity while divvying up its value equitably.
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Define clear terms
Any agreement around dividing business assets needs clearly defined terms to avoid future disputes. With mediation, you can take the time to hammer out all the particulars – who takes ownership interest, how assets get valued, timelines for transfers, conditions for buyouts, and anything else related to the business. You can spell it out point by point so you and your ex walk away on the same page. You’ll save yourself major headaches down the road if it’s all laid out clearly in the agreement.
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Involve neutral financial experts
Divorce mediators often bring in appraisers, accountants, or financial advisors to assess the value of complex assets like a business. These neutral third-party experts provide objective data to inform negotiations. Rather than “taking sides,” they aim for fair solutions grounded in hard numbers, not emotions. This evidence-based approach leads to balanced outcomes and helps you and your spouse navigate through your separation’s financial challenges.
These experts can also analyze divorce’s tax implications. Dividing business assets can get tricky when it comes to taxes. The way you split things up may look good on paper but leave you or your ex with a massive tax bill later on. These financial pros will run the numbers and simulate different scenarios. They can help figure out how to minimize those tax implications for both spouses. So, take advantage of the financial modeling in mediation to craft a tax-smart agreement.
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Protect shared assets
For jointly owned businesses, a mediated settlement helps safeguard that asset. Without a solid agreement in place, tensions could run high if one spouse tries to force a sale or take on debt pre-divorce, which aren’t ideal when you’ve invested years growing your shared company.
Thus, approach your mediation as a team united around one goal – reaching a settlement that lets your joint business emerge intact on the other side. Don’t let your shared business become collateral damage in your divorce.
Takeaway
Going through a divorce is tough. Just imagine how hard it gets when you worry about your business’ fate, too. But with mediation, you and your would-be ex-spouse can work as a team to protect your assets.
So, protect your business and sanity – mediate, don’t litigate. With a neutral mediator guiding the process, you can achieve an amicable settlement that sets you both up for success.
