We are often asked how best to protect business interests to safeguard in the event of a breakdown in a family relationship, typically a breakdown of a marriage.
Cohabitees can also make claims to a share in a business they may have worked in or on. These claims are hard to mount successfully but the disruption and cost can be enormous.
Many people choose not to marry because of often rightly perceived concerns over the powers of the divorce courts only to find themselves on the receiving end of a civil claim from an ex partner. Cohabitation agreements can remove this concern and can also deal with other non-business assets.
For those planning to marry we recommend a pre-nuptial agreement to clarify intentions particularly with regard to business assets. These are becoming increasingly useful and whilst not yet fully binding are considerably more beneficial than having nothing in place.
During marriage putting assets into a family trust can be a useful way of ring-fencing certain classes of assets such as company shares. Although still not fully exempt from the divorce court there is at least Case Law to suggest that courts should be slow to interfere with bona fide arrangements intended to benefit later generations, wider family etc. Alternatively a post-nuptial agreement can be a useful approach to set out the intentions of the couple.
Given the very wide discretion presently afforded to the court on divorce there is no foolproof way to put business property completely out of reach. Our view, however is that pre-nuptial agreements are here to stay, are increasingly viewed favourably by the court and will be the subject of legislation in the foreseeable future. By the time you come to use it, your presently “persuasive” pre-nuptial could well be fully binding.
Should you wish to talk about your arrangements we run a free clinic on family law every Friday from our Market Harborough office from 10am-12pm. There is no need to book, just drop in.
Faye Remnant is part of our Family Law team based in Loughborough; our Solicitors in Loughborough are experts in their fields and dedicated to quality client care. If you would like to find out more about our solicitors in Loughborough please contact us.
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The information provided in all of our blogs reflects only a narrative of some elements to consider on the topic. The blogs do not contain considered legal advice and should not be relied upon as advice. Please see our website terms and conditions for full details of our disclaimer. If you are interested in obtaining advice, please contact one of our lawyers who will be happy and able to advise you on your own particular circumstances.