Many families start their own businesses. Both here in British Columbia and elsewhere in the nation, a significant portion of the working population consists of entrepreneurs that have built businesses they wish to see passed on to their children. But what happens if those children divorce their spouses? This question involves a challenging element of family law that can become quite complicated.
One concern facing family-owned businesses is estate planning. Planning for late life can be a topic some families find difficult to discuss. As a result, many elderly people choose not to discuss their plans even with their adult children. For those that do, the complexity of family law as it pertains to family property can still pose an issue.
For example, in some cases a family-owned business might be left to children in the form of shares of the company, which can be sheltered by way of an estate freeze. However, if the child then gets married, a second tier of considerations would have to be added to the estate plan. This is even more true if the child is already married when he or she receives the shares, because they could be given as the separate property of the child or as marital property, depending on how the plan is written.
Divorce is complicated enough for the couple involved, and becomes even more so when parents and other family members are influenced in a material way. Here in British Columbia, there is support both for parents beginning their estate planning as well as people going through divorce. Making use of experienced attorneys in both of these fields can help smooth out the edges of a family business to ensure it is bequeathed to those the owners wish.