Small business owners face unique stresses in divorce that other individuals may not face, as their business may become a key aspect of their divorce case. The high financial stakes posed by business ownership interests can lead to extensive litigation between divorcing spouses. However, mediation can offer an alternative to divorce litigation for small business owners. A divorce attorney can advise small business owners going through a divorce whether mediation can help them resolve the financial issues in their divorce.
Unique Challenges for Small Business Owners in Divorce
Small business owners can face unique challenges in divorce that other couples may not face, as an individual’s business may qualify as a marital asset subject to division in divorce. Furthermore, calculating an alimony or child support obligation for a small business owner can prove challenging due to the complexities in determining an owner’s income. As a result, the details of a small business owner’s finances may lead to extended litigation that can drain time and financial resources.
Understanding Mediation
Many divorcing couples pursue mediation as an alternative to costly litigation. Mediation provides a formal structure for couples to negotiate a divorce settlement. In mediation, a neutral third party, known as a mediator, oversees the process by facilitating communication and encouraging compromise between spouses. The mediator can provide a neutral perspective to help each spouse understand the other’s position, which can bring the couple closer to a compromise on financial issues in a divorce. Mediation often helps divorces finalize more quickly than traditional litigation.
Key Benefits of Mediation for Divorcing Small Business Owners
Some of the benefits of mediation for small business owners going through divorce include:
- Protecting the Continuity of Business Operations – Mediation can help protect business operations by enabling an owner to secure a quicker resolution to their divorce, thereby reducing the time they must spend away from running the business. Furthermore, mediation can help a small business owner find creative solutions to keep their company intact and successful.
- Maintaining Privacy – Mediation allows spouses to keep their divorce confidential and out of the public record. Although the couple’s divorce settlement may become part of the official divorce decree, medication can keep the spouse’s disputes out of court, which can protect their reputation and minimize damage to company morale.
- Enabling Flexible and Tailored Solutions – Divorce mediation allows spouses to explore flexible solutions to financial disputes rather than having to live with a court’s ruling. Thus, a couple can negotiate a divorce settlement that preserves a spouse’s business while satisfying both spouses’ financial interests. For example, mediation allows spouses to negotiate settlements that involve buyouts of a spouse’s interest, procedures for continued co-ownership, or structured settlements.
- Reducing Emotional and Financial Stress – Ultimately, mediation can help divorcing couples alleviate the financial and emotional burdens associated with divorce. Mediators encourage couples to cooperate on a mutually agreeable settlement rather than taking an adversarial approach in litigation. Thus, mediation can help couples learn how to maintain a working relationship, which can benefit them if they have minor children they must continue to co-parent.
Tips for a Successful Mediation
Best practices that business owners can follow to increase the chances of success in divorce mediation include:
- Gather comprehensive financial documents to discuss your business’s finances
- Obtain an independent business valuation
- Hire a mediator with experience in divorce cases involving spouses with business ownership interests
- Stay open to compromises that prioritize the business’s continued success
Contact a Divorce Attorney Today
If you own a small business, mediation can help you pursue a fair and favorable resolution to financial issues in divorce, such as property division, alimony, and child support. Contact Melinda Weerts Law, PLLC, today for an initial consultation with our legal team to learn more about the benefits of divorce mediation.