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Florida’s new collaborative process law and family businesses

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Florida’s new collaborative process law and family businesses

On behalf of Law Offices of Barry I. Finkel, P.A. posted in Collaborative Law

On behalf of Law Offices of Barry I. Finkel, P.A. posted in collaborative law on Wednesday, May 4, 2016.

In March of this year, Florida Governor Rick Scott signed the Collaborative Law Process Act. This means that the "collaborative process" is now a recognized alternative to traditional litigation. Florida now joins 14 other states that already have such a law.

The new Florida statute describes collaborative law as "a unique non-adversarial process that preserves a working relationship between the parties and reduces the emotional and financial toll of litigation." As we've discussed here previously, many couples seek a collaborative divorce for just those reasons.

They work together set the terms of their divorce with the help of their attorneys as well as that of neutral professionals who provide financial, parenting and other types of advice. If they have children, a collaborative divorce can help spare the kids any more emotional pain that their parents' break-up has probably already caused them.

For divorcing couples who own a business together, a collaborative divorce has a number of advantages. First, it is more private than a litigated divorce, so there's less chance of details getting out that could impact the company's success or employee morale.

Further, because neutral financial advisors and accountants are used, there is generally less impact to the business than if each spouse hired his or her own accountants who debated over whose numbers were right. Having one financial professional working for both sides also saves money.

By resolving how the ownership of the business will be divided moving forward, couples avoid having a judge who has no emotional or financial connection to the business deciding what is best.

Lastly, while not every divorce that starts in collaboration is able to continue using that process, over 80 percent do. Of course, some couples simply have a relationship that's too fractured to allow them to work collaboratively to resolve either personal or business financial matters.

However, for those who can, they often are able to remain amicable enough to continue to own the business together and to help it thrive. This is not only financially beneficial for both of them. It lets them hand down an important legacy for their children to continue after they're gone.

While most of the professionals involved in a collaborative divorce are neutral, each spouse needs to retain one's own attorney. Your attorney will work to ensure that your rights are protected, but with an eye to resolving issues using the collaborative process.

Source: South Florida Business Journal, "Divorce doesn't necessarily mean the destruction of a family business," Robert J. Merlin, April 27, 2016

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