In this week's blog, we look into the difficult issue of separating in marriage, and in business.

The dilemma:

I recently separated from my husband after a very difficult couple of years created by his excessive working hours and lack of family commitment. 

We have two grown up children which has given me the confidence to walk away. He runs a very successful family business, where I also worked throughout our married life only taking a break to bring up our children when they were first born.  I never had a formal directorship or shareholding but wondered whether I have any entitlement to its assets as part of our divorce proceedings given I was an integral part of its success?

Divorce Doctor Alasdair Loudon says:

I am sorry to say that the situation in which you find yourself is not clear cut.  While it certainly sounds as if you deserve to share in the value of the family business which your husband has built up, the extent to which you will be able to successfully claim a share will depend largely on the history of the ownership of the business.

From your perspective the problem with a family business in a divorce is that assets which have been inherited or gifted down a generation do not form part of the matrimonial property which is available for division. If the shares which your husband holds in his business were gifted to him by his family or if he inherited them, the shares will not be matrimonial property and therefore you will not be able to claim directly on the value of the business. If on the other hand, your husband started the family business during the marriage or if the company has been restructured during the course of the marriage, the likelihood is that you would be in a position to claim up to 50% of the value of your husband’s shareholding. 

Careful scrutiny would be required by a solicitor of the share history before a definite view could be taken. If part or all of the shareholding was created during the marriage it will be necessary to have the business valued by a forensic accountant and only then would it become clear how much you might be able to claim.

You will not be able to insist that shares in the business are transferred to you because the court has to try to achieve a clean break between you and your husband. Any entitlement will come in the form of a cash sum to be paid to you by your husband.

If you are unable to claim on the value of the business, there are other routes to making a successful claim based upon the extent to which your own career opportunities may have been disadvantaged while you have been supporting your husband in his. But such a claim would almost certainly be worth less than if the shares turn out to be in the matrimonial pot.

Alasdair Loudon is a divorce and family law expert at Turcan Connell. 

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