Hidden business partners HOW MANY businessmen or businesswomen realize that their spouse or the spouse of their business partner may gain an interest in their business on marital break-up? The new ‘‘partner’? many times is uncooperative and can wreak havoc with the business. The Family Relations Act of British Columbia provides that upon the happening of certain events each spouse has an un- divided one-half interest in all family assets. It does not matter whose name is on the registration or other ownership document. The events creating the interest include a divorce and the signing of a separation agreement. The interest can oniy be changed by agreement or by court order and agreements are subject to the review of the court on the basis of fairness. lt is only ‘‘family assets’’ that are subject to the division between spouses in this manner. A business can become a family asset in many ways. One way a business can become a family asset is if the non-owning spouse contributes e¢i- ther directly or indirectly to the acquisition or operation of the business. Housekeeping or child rearing responsibilities can con- stitute the necessary contribution. However, there must be a con- nection between the contribution and the asset. For example, housekeeping and child rearing responsibilities could constitute contribution if one spouse under- took the responsibilities and that allowed the other spouse to have the time to acquire or operate the business. Recent case law suggests that the connection between the con- tribution and business asset might Family Affairs HUGH STARK mis KIRSTIE MACLISE not be as apparent as previously thought. For example, a business of a husband was recently found to be a family asset on the basis of the wife’s contribution in cir- cumstances where the wife was excluded from the husband’s business iife, there were no children of the marriage and the wife had housekeeping and gardening help. The basis of the contribution appears to be related to some household responsibilities and the care of the husband for a one-year period when the husband was sick. While the wife in that cir- cumstance was only awarded 15% of the value of the business assets, Upper Deck™ NFL football cards, Premiere Edition. Each box contains 36 packs of 12 cards. Reg. 59.99 HALF PRICE* Ali satin ball Christmas omaments Reg. 1.99-5.49 40% off* All Christmas wrap, bows, tags and boxed cards. ne | Craftsman® ‘Marque’? router 7 amp bali-bearing motor. 2 yr. warranty. Reg. 57.77 13-pc. steel router bit set Craftsman® 7-pc. screwdriver set 14° Reg. 21.99... NORTH VANCOUVER, Capilano Mali, open daily 9:30-9:00 p.m., Sat. 9:30-5:30 p.m., Sun. noon to 5 p.m., phone 985-7722 _.... 99°27 Pyrex 12-pe. set Reg. 49.99 Dinnerware Reg. 78.88 .. .. 45 pc. set fine chins. only 36% French White Corningware - §-piece set WOW! 19.99 Discontinued bedspreads WOW! $.99 Discontinued pillows that percentage amounted to over $2 million. That case related to a marriage that was of approximate- ly seven years in duration. Where there are sufficient assets in existence, a court may divide the assets so that the owner spouse keeps the business asset and the non-owner spouse keeps the other assets of the same value. However, there normally are not sufficient assets to divide them in this manner. The owner spouse may wish to buy out the non- owner spouse, but, there may be insufficient liquidity to do that and continue the operations of the business. If the non-owner spouse is not bought out, the bank may not be willing to continue to lend credit to a business partly owned by a spouse who has not provided the same security for loans as the other business partners. Further, confidential information concern- ing the financial affairs of the company will be available to the non-owner spouse. The effects of marriage breakdown should be considered by the business partners before it occurs to avoid or lessen the risks to the operations of the business. Most businesses consider outside competition to be a major ongo- ing concern. They should also look to the possibility of marital instability from within as a major concern. Questions about family law and estates can be directed to Hugh Stark and Kirstie MacLise c/o Family Affairs, North Shore News, 1139 Lonsdale Ave., North Vancouver, B.C. V7M 2H4 Juvenile twin size sheet set Women’s cotton sweaters Crechet yoke. 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