That’s why I would always recommend that clients who own a business talk to their accountants at the outset of a marriage breakdown.
Solicitors and accountants will often work together when a couple is going through a divorce, particularly if one party has their own business, or if the couple are ‘co-preneurs’ and jointly own a company.
Although as a business owner you are probably financially savvy, you are unlikely to be comfortable dealing in the financial matters surrounding divorce – particularly when it comes to agreeing the split of assets with your former spouse.
By employing an accountant, business owners receive the professional help they need to identify earnings and ascertain the value of any shares, investments, options and pensions.
In particular, an accountant will know how to evaluate the worth of the business – whether that’s a sole trader, a partnership or a limited company.
Discussing business and taxation affairs with an accountant as soon as it has been agreed to separate is a helpful first step towards the financial disclosure element of any divorce.
Depending on your personal situation, it may be advisable to see the accountant first – indeed he or she may be able to recommend an experienced family lawyer. However, if a situation is acrimonious, then a divorce solicitor should still be the first port of call.
If your ex does not work, then his or her lawyer will request appropriate disclosure of your income and assets. A key tip, however, is not to make rash promises about a house and maintenance before you speak to both your lawyer and accountant.
Sometimes a forensic accountant will need to be called in to examine information provided to lawyers if it is viewed as incomplete or suspicious. For instance, if one party claims to be poverty stricken, but is seen buying new cars and going on expensive holidays.
Unfortunately, some people try to hide their assets or try to reduce the profitability of their business so that they can reduce their income levels and payments to their ex. As I have written previously, no court will look favourably on this behaviour – and if you hide assets, you will be found out.
If you have a business to protect through a divorce then a chat with your accountant makes good financial sense.