Divorce and the Entrepreneur

Catherine Spanu, Burns & Levinson

Catherine Spanu, Burns & Levinson

Many divorcing spouses worry about the possibility of their spouse selling assets during a divorce and leaving little or nothing to be divided. It can be particularly problematic if a spouse was financially controlling or secretive, or handled all the finances during the marriage with the other having a limited idea of the full financial picture. One could sell assets that the other doesn’t even know exists. Or, a spouse might transfer money or property to a family member to try to prevent it from being accessed by the other spouse, anticipating that the family member will transfer it back after the divorce is final.

But will the Court really allow a spouse to cause financial harm to the other by allowing assets to be sold or transferred in this way? Probably not, due to Supplemental Probate and Family Court Rule 411. This is sometimes referred to as the “Automatic Restraining Order” or “Rule 411.”

This article will discuss how Rule 411 works, and what Rule 411 does (and does not do) to protect marital assets for equitable division during the divorce process.

Rule 411 Goes Into Effect When a Complaint Is Filed or Served

Once the spouse who … Keep reading

office files

Hi there,

Massachusetts is an equitable division state. This means that all property, whenever and however acquired, may be subject to division as well as utilized for support in a divorce case.  If you are an owner or a shareholder in a closely held business and are facing divorce, you need to be braced for the discovery that will soon be headed your way.

office filesThe documents which are considered basic and minimal in order  to value both the business and determine the owner’s true income with perks, are often some of the most private documents of the business.  At least five years of tax returns, audited or unaudited financial statements, buy/sell agreements, offers to sell or buy the business, inventories, insurance policies, customer lists, patents, the list goes on and on.  It is a good idea to have either in-house counsel (if you have them), or hire outside counsel, perhaps referred to you by your divorce attorney, so that the proper protections for the business during the litigation can be put in place.  At the very least, a confidentiality agreement should be signed and approved by the court before the documents are produced.

Most valuation experts and forensic accountants … Keep reading

Hi there,

Whenever a business owner, major shareholder and/or entrepreneur gets divorced, the annoyances, intrusions and disarray caused by the process itself spread beyond the immediate family.  The business itself, regardless of size, is in for it too.

Entrepreneurs have a high divorce rate, and it is partially because the demands of business creation can outweigh the demands of family.  Given the statistics, it is a good idea for business owners and boards to have thought through and decided how to handle the inevitable involvement the business will have in an owner’s divorce.  There are a number of ways you can try and protect your business long before divorce is on the horizon.  Entrepreneur.com has some good suggestions.

If you are the entrepreneur, expect that for a while you will no longer have the focus on the business that you used to.  Everyone — and as far as I have seen it affects everyone — has short term memory loss in some stage of the divorce.  They are distracted, unable to think clearly, and often are just plain depressed.

I always request that my clients see a counselor during the divorce process, as it makes sense to … Keep reading