Many married couples are in business together. Whether it's a mom and pop store or a Fortune 500 company, if the couple divorces, that break-up can have a serious impact on the future of the business, as well as its co-owners and investors.
Divorce Can Send Stocks Plummeting if Investors Get Nervous
Large family-run businesses have suffered plummeting stock prices after a drawn-out, expensive, messy divorce. However, if a couple can put aside their acrimony toward one another and focus on what's best for the business, it can survive and prosper -- helping both of them prosper as well, post-divorce. Investors will be watching closely to try to determine what the future of the company will be and whether they need to keep their shares, sell them or buy more.
One high-profile example of a company that continued to thrive after a couple's divorce involves the 2010 split of real estate tycoon Steve Wynn and his wife Edith -- both shareholders in Wynn Resorts. There was some initial uncertainty among investors when the balance of their ownership shifted, and Mrs. Wynn got nearly half of her husband's shares in the company. However, both stayed with the company, and it has continued to do well.
A Prenuptial Agreement Can Make All the Difference
Whenever one or both spouses-to-be own a business, it's always wise to have a prenuptial agreement. If the business is started after the marriage, a post-nuptial agreement can be drafted. Either of these should detail how the business will be split in a divorce.
A prenup or postnup can help the divorce go more smoothly and cause less of a financial impact on the company. It can also help reassure other owners and investors that there won't be a battle over its future.
Divorcing couples who are splitting up ownership of a business will benefit if they can put their emotions and resentments aside and work toward an agreement that will benefit the company. Even if one spouse chooses to sell his or her interests in the business, it's still to that person's advantage that it be financially strong at the time. Divorce attorneys with experience handling divorces for business owners can help spouses work toward a settlement that is in their best interest as well as that of their company.
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