Owning a business with or without your spouse brings additional complications you should consider with your divorce. However, these complications make mediation the ideal method for resolving your divorce.
Dorit L. Goikhman, the founder of Off the Record Mediation Services, LLC, is a trained mediator and family law attorney helping high-net-worth spouses with businesses use divorce mediation. With her experience as a family law attorney, she can help you navigate the negotiations around divorce and your business.
Before you begin working with us, here’s what you should know about divorce mediation if you own a business.
What You Should Know about Divorce Mediation When You Own a Business
Divorce mediation is an alternative means of dispute resolution used to negotiate a settlement for a divorce. With divorce mediation, the mediator is a neutral party there to help facilitate the parties’ discussion. Successful divorce mediation results in both parties reaching a mutually agreeable settlement to resolve the divorce.
Divorce Mediation is Less Expensive, Faster, and You Retain Control
Divorce mediation is often cheaper and faster than litigation for a divorce when you own a business. Why? Because there are many factors to resolve related to the company’s ownership and valuation. In litigation, both parties have attorneys and experts billing for their time. Plus, court schedules determine the timeline for divorce litigation.
Divorce mediation avoids the time and expense of litigation because the parties share costs and control the timeline, involvement of attorneys, and outcome of the mediation. The goal of divorce mediation is for the couple to reach an agreement about the distribution of assets, debts, spousal support, child support, and child custody within the mediation. The parties work together to find a solution they can both be happy with.
Divorcing Spouses Can Use Mediation to Decide Whether a Business is Community Property
The first issue that must be resolved in a divorce mediation when one spouse owns a business is whether the company is community property. If a previous agreement does not decide, the spouses can reach this conclusion together in mediation versus having a judge decide.
Mediation Can Decide the Percentage of Ownership and How to Value the Business
If the business is community property, then the parties will need to determine the valuation of the company and the percentage of each spouse’s ownership of the business. Litigation can involve numerous experts reaching different conclusions. In divorce mediation, the parties agree on the experts needed to determine the valuation and the method of valuation for the business.
Similarly, the parties can work together to determine the percentage of ownership each spouse has. If one spouse buys out the other spouse’s ownership, the divorce mediation can address a schedule for the buyout. Finally, spouses can use divorce mediation to address how the fluctuation of business income can affect spousal support and child support and decide on a resolution to this concern.
Divorce Mediation Can Address Concerns that Affect a Business Partner
Divorce mediation can make the process easier for business partners or employees affected by the divorce. The parties can resolve the divorce faster and minimize disruptions to the business. Because divorce mediation is confidential, mediation can also reduce the publicity surrounding the divorce and help you protect your professional reputation and, thus, your business.
Divorcing Partners Can Use Divorce Mediation to Pave the Way for a Successful Future Relationship in the Business
Divorcing spouses may plan to continue to work together in the business after the divorce. If so, divorce mediation is a great choice to help pave the way for a future relationship. Mediation allows the spouses to avoid the contentiousness of litigation and work collaboratively, leaving them better positioned to continue their business.