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Divorce/separation

Here you'll find divorce help and support from other Mners. For legal advice, you may find Advice Now guides useful.

Original poster

Divorce when business is a marital asset

55 replies

Tobeornotbe84 · 22/03/2022 17:19

Hi,

I am hoping to hear from someone who might have divorced where a business was involved.

My husband and I have been married 4 years & together for nearly 10. I supported him before he set up his business and after and throughout the running of it. Without going into details, he has been horrendous to live with and after having a child his behaviour got even worse.

Our marriage is broken and it’s not getting fixed. He has moved temporarily to live with his parents and I’m in the house with our daughter who is just over a year old now.

We are now looking at financials. He has a business and we have a house cars pensions etc
My husband has offered all the profits in the house 85k plus £1200 payment per month and the bank account will be halved between us.
I would like to hear opinions from people who have been in similar situation. I have been told by solicitors that the offset against the business could be the profits of the house but then I have also been advised that my daughter and I could get shares from the business too.

We are trying to amicably agree, am I being too pushy if I ask for shares in the business too ? My daughter and I would have to sell up and buy another house, it’s a big upheaval and if his business could support it, then of course we would want to stay in the house.

Any advice is appreciated.

OP posts:
Original poster
Tobeornotbe84 · 22/03/2022 17:20

I would say as well that our child is only just starting nursery which is costing £800 a month so most of his payment will be covering that.

OP posts:
gogohm · 22/03/2022 17:33

All depends on the business. I would suggest you look at the accounts and also make sure you have an annual review agreed. As a business owner child maintenance is sometimes difficult to get so definitely try for amicable

millymolls · 22/03/2022 17:53

Depends on the business
At face value 100% of equity plus shares seems too much but depends on what type of business it is and it’s valuation
£1200 a month suggest very high income

Movingonup22 · 22/03/2022 17:55

You need an independent valuation of the business - and don’t worry about being “pushy”!

I can guarantee your husband would not dream of calling himself pushy!!

Original poster
Tobeornotbe84 · 22/03/2022 17:57

The £1200 includes 800 nursery fees !
I’m part time getting just under 1500 a month
He has offered an extra £300 to top that up and our bank account would be split in half …
I’m getting some conflicting advice from friends who think that we are entitled to shares but I am not sure ? Like you said, full profit of the house and the rest seems fair but it’s hard to know…

If his business allows for 10k dividends a month it could avoid us having to sell up and move home

OP posts:
Movingonup22 · 22/03/2022 18:16

Well obviously it’s hard to know if it’s fair if you don’t know what the value of the business is and how much profit it makes in!

I’m not sure how you think you can work out if it’s fair or not without that information????

Marchmount · 22/03/2022 18:41

How much do you need to stay in the house? If you’ve only got £85k equity I assume you’ve got a large mortgage.

Will also depend what kind of business it is. If it’s solely dependent on him (skills, expertise etc) then I can’t see any benefit to him in keeping it going if you expect him to hand over a huge chunk of the ongoing profits to you.

Original poster
Tobeornotbe84 · 22/03/2022 21:20

I completely agree. But because I actually respect him and his family - I feel a bit awful asking for the information. However it’s for me and our daughter who is still very young and he has decided he will not change his irrational and aggressive behaviours ( he is from an extremely privileged background too - not that it makes a difference but just explaining this because him and his family think he can do no wrong ) … anyway, I should ask and I think I need to think of it in a different and more practical way. This is to ensure that our child gets the best support she can. A child is not cheap and she will want to do all sorts as she gets older !

OP posts:
Original poster
Tobeornotbe84 · 22/03/2022 21:21

Message above is meant for @Movingonup22

OP posts:
Harridan1981 · 22/03/2022 21:22

£10k p/m dividends for a part shareholder sounds like a large company...

Viviennemary · 22/03/2022 21:26

Younwill need to seek the advice of lawyers.After such a very short marriage. I can't see you willl be entitled to a share in a business he set up.

SeasonFinale · 22/03/2022 21:30

The business needs to be valued and the pension needs to be valued before you can make a decision. You haven't said what is in the account either. Is that half of £200 or half of £20k?

Remember that £85k will not be an £85k deposit once you have fees and stamp duty to pay if you are going to buy. Speak to a broker to see what you can feasibly borrow and whether that will provide adequate housing for you.

If the business is worth more than £85k which I assume it does then he may have to fund an additional amount to pay to you.

Seek legal advice and they will instruct forensic accountants to ascertain the value of the assets. Only then can you see what is fair. A promise to pay £1200 can soon disappear and a return to court to vary this down inevitably happens and income suddenly decreases! You may be better off going for a clean break with a bigger capital amount and child maintenance.

SeasonFinale · 22/03/2022 21:31

@Viviennemary

Younwill need to seek the advice of lawyers.After such a very short marriage. I can't see you willl be entitled to a share in a business he set up.
Behave. Read the OP. She has been in a long term relationship and helped him set up the business and support its running.
Movingonup22 · 22/03/2022 21:34

How is it not respectful to ask for information I the value of an asset you have a 50 per cent interest in?

You need to find your self esteem and self worth and get what both you and daughter are entitled to

averythinline · 22/03/2022 21:36

You need proper financial advice ...often a forensic accountant is needed for businesses..
You need to be sure for yourself and your DD ...

ZenNudist · 22/03/2022 21:44

I am a forensic accountant. You are entitled to half of everything, including the business. Simply put. Well actually he will have to buy you out of your share but it depends on liquidity. I don't think he will want to settle on you being a shareholder. He should buy you out. You are entitled to share the the value of the business now not all its future growth. That's hisbased on his work.

My job includes valuing businesses as part of the financial settlement. £10k dividend a month tells me the business is doing well. That's presumably his salary?

Is it a company or is he a sole trader? I've known people wind up businesses and divert contracts to new companies to hide profits. I can't stress this enough. You need professional help. If its a company go on companies' house and get the accounts. It will also be evident from his tax returns what he has been taking out.

He's nit going to like it but sounds like he's

millymolls · 22/03/2022 22:10

You’re not entitled to half of everything
You’re f turned to a fair share of all marital assets which could be more or less than 50%. This will be based solely on your own circumstances and both parties needs and no one here can determine the outcome

However, that aside, you need to understand how the business is owned, and what value it is.

millymolls · 22/03/2022 22:11

You’re entitled to not you’re f turned !!

Original poster
Tobeornotbe84 · 23/03/2022 09:00

@SeasonFinale you’re absolutely right. My problem is that I’m trying to be as amicable as possible. When I made the suggestion about me keeping the house and him keeping his business it felt so easy. He said it was very sensible !

I am not a money grabber but do want the best for my child and I. The account we have is about 12k and I also took 3k off a credit card for him to pay off and said I’d continue that which I now regret offering. This was only a verbal discussion may I add.

I have taken some legal advice and have been informed that as an offset from the business I can take all the proceedings from the house.
I do feel maybe I’ve been to reasonable by saying I’d split the bank account and take his credit card !

His business isn’t huge but I know he has doubled it in size since he bought it originally for 160k. And yes I supported him before the business during the set up and all these years he has ran it.
He is an ex boarding school boy and since having our daughter he has gone downhill and just doesn’t want to be around us or make it work …

So, I should ask him for his accounts ( may I add when I mentioned it before he got very angry but luckily he has a step dad who bought the business for him originally who is more level headed and has been involved in all of this ) his stepdad thinks I have been extremely reasonable but … my husband since the divorce plans has started to say business is struggling and that he has sold all of his stock … also mentioned to me how savvy his stepdad is in business.
They don’t want to pay solicitors either and are very money focussed. I’m happy to do this amicably too but it has to be fair and I feel he has to share the details of his business.

He used to stare at his profits when he was at home with me..: all the time. It is just him in the business so it isn’t huge but I know he was saying he could pay himself 4K ish in dividends …
But now he’s telling me he’s given half his salary away (the 1200 a month ) it’s actually less than half and that he will have to look for shared accommodation…

It’s just so tricky: I want to be fair and amicable but equally if he and the business can support me and our child then why should I have to uproot our life and start moving etc

OP posts:
SeasonFinale · 23/03/2022 09:29

It sounds very much to me that he has already started the mind games with you.

You keep the house I keep the business. You know the business that was once successful but now has started to fail!! We don't need lawyers etc. I suspect he doesn't want you to look at the business because it will be clear that you are being shafted here and nothing else.

Original poster
Tobeornotbe84 · 23/03/2022 09:32

@ZenNudist

Thank you so much for this !

So; when you say he would have to pay me shares, would this be the case if he agrees to give me profit of the house. I guess in that case it would all need splitting in half. House and business shares…

It is a limited company and he works alone. He says his dad is very savvy but equally I know they are straight laced and I’d like to not think they would do anything dodgy.

They kept on asking me what I wanted so I just gave them a breakdown of how much I had the house valued at etc and costs of moving and new house mortgage etc. and then his dad was like okay so the £1200 exactly covers it. Which it does, alongside my part time salary but it JUST covers it. I’ve got another solicitor ringing me today so I’m guessing they will say the same that I need profits etc details of what the business does on a month to month basis and a valuation. My husband tried to brush that off by saying it’s still only work 160k but I know he has doubled it.

I don’t want to be greedy or to lose out … I wish I could talk to someone who has been in a similar situation with a divorce and business involved ..

OP posts:
Original poster
Tobeornotbe84 · 23/03/2022 09:35

@Movingonup22
Thank you for saying this. I am trying. He has knocked all my confidence out of me. Maybe that’s why I’m not being as tough. I am usually a very tough and forthcoming person but honestly a shell of myself now. I feel like I’m not fighting this properly because of all the verbal abuse he has given me… mainly to knock my confidence which has worked ! He wanted to control everything and me in particular … and in a way he has taken control with me being the way I am now.

Trying hard to find my self worth again in this really hard situation

OP posts:
Original poster
Tobeornotbe84 · 23/03/2022 09:38

@SeasonFinale

I think so re the mind games ! He has done this for ages and has warped my mind but I’m working on straightening things back ups.

It’s kind of my doing in me saying I keep the house but it’s because he kept on saying look you kee the house etc so I thought ok not a bad suggestion. I then went into the meeting with him ( me him and both our dads ) and made the suggestions as per my post and kind of verbally agreed but then afterwards I spoke to people who know all about this and they all say there’s more in the business and it will be me going through the stress with our small child who is only just a year old !!

OP posts:
SaffyWall · 23/03/2022 09:40

If it's a Limited Company then some of the accounts information should be publicly listed at Companies House, so that might be a good place to start? Some people's accounts can be dodgy/false of course, but it would still be worth taking a look.

www.gov.uk/get-information-about-a-company

M0RVEN · 23/03/2022 09:41

You need to listen to @ZenNudist OP. She has given you excellent advice - follow it to the letter.

This is a specialist area and not every divorce lawyer will know about it.

If you get shares in the business he can just run it down and start another one.

He can also avoid paying child support or spousal maintenance by hiding his income.

It’s tricky situation to be in. You need as much money are you can get upfront. You will probably get nothing for you or your child later.

You need to let go of your desire to be “ amicable “. All that means is letting him keep more than his fair share and depriving your child in the name of “ niceness “ .

Rich clever business men will fight for everything they can get and you need to do the same. He’s already selling assets.

Also he’s a fool if he thinks he can do this without legal advice . I’m guessing that he has in fact instructed a solicitor and he’s just saying this so you DONT get one yourself .

Has he suggested that you just sort this out between yourselves? To save legal fees and keep it amicable ? If so that’s a clear sign that he’s about to screw you over.