In a business family, any divorce has important business implications. In this article we look at the different scenarios that can arise and how to anticipate them in advance.
Two divorces for every three marriages
This is a fact. The chances of a couple ending up separating are very high. According to data from the National Institute of Statistics, in Spain there are two divorces, separations or annulments for every three marriages. In 2022, 20% were conflictive dissolutions, while 80% of the cases were by mutual agreement. And it should be borne in mind that these data do not take into account unmarried couples, who for civil purposes can have the same consequences as married couples.
For this reason, in the family business, it is necessary to be realistic and always make provision for the eventuality of a divorce within the family.
What to do before and after getting married
Community of property or separation of property?
Divorce is prepared before the wedding. Because one of the most important factors in determining the fate of a business after a divorce is the applicable matrimonial property regime. The most common are:
- Regime of separation of property. The assets of both spouses remain separate, although subject to certain duties of family protection.
- Community property regime. This is the one applied by default in most of the Autonomous Communities, and it complicates things considerably in the event of divorce. Because it differentiates between the assets of each of the spouses and those of the marriage itself. Broadly speaking, each spouse keeps as his/her private property what he/she had before getting married. Whatever either of them earned during the marriage belongs to the community of property. In the event of separation or divorce, the assets of the marriage must be liquidated and divided equally.
Marriage contracts
Marriage contracts allow the spouses to regulate their financial relations. For example:
- Applicable matrimonial property regime. At its most basic level, the marriage contract allows, for example, that instead of the community of property regime, the separation of property regime is applied.
- Referential matrimonial adjudication. This makes it possible to anticipate the distribution of assets in the event of divorce. For example, it is possible to determine that one of the spouses keeps the business in exchange for a definite financial compensation.
- Inheritance transcendence. Allows the inheritance improvements to be anticipated. For example, by reserving a higher share in the company for one or more of the children.
It is important to note that an agreement may be granted before the marriage, but also at any time while the marriage is still in force. They are particularly advisable when the couple is going into a joint business or if one of the spouses has a business project.
The family protocol
Family protocols are covenants applicable to family businesses, useful to regulate the internal functioning. For example, they can define in detail the process of generational succession, requirements for entering or leaving the company, corporate culture…
The ultimate aim of family protocols is to bring stability to the family business. For this reason, they are also key to avoiding part of the conflict in the event of separation or divorce.
Other caveats
Even in marriages in community of property, one of the spouses may contribute funds to the family business by reserving a right of reimbursement or by expressly declaring its privative character. Otherwise, it will be considered as a contribution of property and it will be difficult to prove its privative character in the event of divorce.
In any case, each case and the circumstances of each company, marriage and individual must always be analysed separately. To avoid the family business being directly affected by the marital breakdown, it is key to seek specialist legal advice before mixing family and business.