Is There a Business in the Family? – Collaborative Family Law is for You

Tessa M. Bair, a Family Lawyer with Bair Family Law Professional Corporation

You would like to settle issues arising from the breakdown of your marriage or relationship and there are a variety of methods that you can use to achieve your goal. How do you know which is best for you? It is important that the method that you use be as stress free, practical and cost-efficient as is possible. It is also important that you tailor your method to your specific needs and circumstances.

You may have heard about Collaborative Family Law. As a method of resolving family issues, it offers many advantages over more traditional approaches. It is generally more cost effective than traditional approaches. It requires a civil and respectful process, without the involvement of a Court. It focuses on the needs of your children, to ensure that their future is as healthy and secure as possible. It offers you greater control over your process and allows you to secure your financial future. But what you likely didn’t know about Collaborative Family Law is that, if you are a business owner, or the spouse of a business owner, it can be a superior option for you. Here’s why:

1. Information Gathering – Family Law cases involving businesses can be slightly more complex than typical cases. The income of any business is relevant for determining support payments. However, business income is somewhat less fixed and certain than other forms of income, such as employment income. Also, the value of a spouse’s interest in any business must be identified for property division purposes.

In order to identify the income produced by a business or its value, spouses regularly obtain the assistance of experts, such as accountants or valuators. In non-Collaborative cases, each spouse might obtain his or her own expert and, in doing so, spend time and money to obtain that expert’s recommendations. There may be conflicting opinions between the experts, resulting in further argument and expense.

In Collaborative cases, spouses often work with a cost-effective and jointly selected neutral, a Financial Specialist, who assists them in compiling all necessary business information and jointly selecting any required experts. The spouses can work together and share the cost of a single, mutually agreeable expert. They obtain recommendations in which both can feel secure and confident, without the conflict, uncertainty, competing opinions and cost associated with a non-Collaborative approach.

1. Unequal Understanding – Generally, when one spouse has an interest in a business, he or she has a detailed understanding of the earnings, operation and value of the business that far exceeds that of his or her spouse. This often leads to feelings of uncertainty or mistrust on the part of the non-business-owning spouse. This, in turn, leads to heavy reliance on expensive legal professionals and aggressive requirements to support all claims made by the business-owning spouse. Yet again, cost and acrimony can escalate.

In Collaborative cases, the spouses work with their jointly selected neutral to ensure that each has all relevant information necessary to appreciate the business issues. The neutral can provide guidance and education to ensure that neither party feels inadequately prepared. The spouses’ jointly selected expert (accountant or valuator) can meet with both parties to answer any questions, explain all relevant approaches and outcomes and close any information gap. Both spouses feel supported and informed, trust levels are increased and acrimony and cost are reduced.

1. Privacy – In many situations, a business-owning spouse will be concerned that business information that is confidential, sensitive or valuable may be made public, in the heat of a family law negotiation or battle. This is a reasonable concern. Court documentation and court hearings are, in almost all circumstances, open to the public at large. Business information that is exposed in these contexts could be misused.

In Collaborative cases, the parties agree that they will not proceed to Court. Their issues are discussed and resolved in a private context. Information is only shared, on an as-needed basis, with specific and trusted professionals selected by the spouses.

1. Uninterrupted Business Functioning – When family law issues erupt, a business-owning spouse, and any business partner(s) of that spouse, can become concerned that financial and other demands imposed upon the business in the legal process will impair or interrupt the functioning of the business. This is a bona fide concern. The sheer time and stress of participating in a legal battle may impair the business-owning spouse’s ability to manage the business. The business-owning spouse could have to sell his or her interest in the business, to satisfy family law obligations. In rare cases, a Court can appoint a receiver to take over certain operations of the business.

In Collaborative cases, the spouses generally work to maximize their financial resources for the benefit of the separated family. This means that they generally work to maximize business success. Usually, they start from the position that pre-existing arrangements, business or otherwise, should not be amended without a reasonable basis and that they will be transparent in their dealings, so that neither needs to fear that he or she will be hijacked by the other.

These are just a handful of the reasons why business owners, or their spouses, might favour Collaborative Law for the settlement of their family law issues. To gain a better understanding of how Collaborative Law could work for you, contact a Collaborative professional in your area. Search the web to identify your local association of Collaborative Law professionals, any of whom would be happy to speak to you about your options for a ready and rewarding settlement of your family issues.

Authored by Tessa M. Bair, a Family Lawyer with Bair Family Law Professional Corporation

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