Understanding the difference between high-asset and standard divorces can be confusing. The main way these two processes differ is due...
Succession planning helps secure the future of your company and heirs after a divorce. This critical business strategy facilitates a smooth transition of leadership in family-owned businesses.
Unless you have a written business succession plan, your interests may lack protection due to Canada’s equal division principles. However, inheritances and gifts may not be subject to this rule. This is why it is important to document your wishes. Learn more about how divorce affects your family business and heirs so you can protect the future of your company.
The first step in developing your list of potential successors is to identify the positions that are crucial for your company’s success and who could fill those vital roles. Whether this is your former spouse, child, or another heir, finding and developing this talent should not wait until after you sign the divorce decree.
Divorcing couples should work together to provide training and mentoring that equips your identified successor with the skills and experience they need to help the business thrive. While this may be a difficult and emotional task, try your best to focus on the company’s needs during this often stressful time.
Once the divorcing business owners have identified potential successors, the next step is to create a succession plan. Developing a well-thought-out plan for how to transfer the company’s leadership to its successors, either after the divorce or in the future, could help create a smooth transition for your heirs.
Your lawyer could guide you through the process and help you set responsible timelines while establishing roles and responsibilities. Ensure that stakeholders, such as employees, key clients, and other family members, are aware of your plan and how they fit into the company’s future.
During a time when it seems like relationships are coming to an end, having a succession plan could help preserve those connections. These arrangements could help prevent disputes between heirs, smoothing the transition from one leadership team to the next.
This is why the experienced family lawyers at The Riley Divorce & Family Law Firm suggest keeping your inheritance separate from marital assets. You should also make sure you have a clear understanding of your former spouse’s intentions regarding the future of your family business.
Contact The Riley Divorce & Family Law Firm at any time. We are here for you 24 hours a day to help divorce-proof your heirs’ rights to the family business. We could help you develop strategies, such as succession planning and more.
We recommend you clearly specify your intentions to protect the company from potential claims during the dissolution of a marriage, and we could help with this. Then, once your divorce is final, we could update your will and other estate planning documents to reflect your current situation.
Paul Riley Law Office
