We are picking up where our Oct. 4 post left off. We were discussing small businesses, their owners and founders, and the effect marital discord can have on the business. A recent article reminded us that divorce can exact a high price from a Chicago small business by distracting the owner and, perhaps, draining the company's financial resources.
It doesn't have to work this way.
First, while Chicago celebrates Columbus Day this week, family law attorneys are marking another kind of anniversary. On Oct. 12, 2010 "no-fault" divorce became available in all 50 states; couples no longer have to accuse each other of infidelity or drunkenness. For example, the Illinois law, adopted in 1984, allows couples to divorce if "irreconcilable differences have caused the irretrievable breakdown of the marriage" (750 ILCS 5/401).
The advantage of a no-fault divorce is that it allows couples to split amicably. Without accusations and counter-accusations, the two can focus on division of property, child custody and spousal support (if appropriate). The objective is to keep costs and disagreements in check.
The impact on the business depends in part on the involvement of both spouses. Think about Frank and Jamie McCourt. She managed the Dodgers until shortly before they separated. When the marriage dissolved, the team lost its chief executive and faced a seriously distracted owner (or co-owner). Granted, the Dodgers aren't a small business, but the ball club has suffered mightily during the McCourts' acrimonious split.
If a big business like the Dodgers can fail, you have to believe a small business can, too. If at all possible, business consultants and family law experts say, work out the details before the marriage or as the business forms.
We'll discuss some options in our next post.
Source: Financial Post, "You don't have to lose your firm in a divorce," Deborah L. Cohen, Oct. 3, 2011