Divorce Services for Entrepreneurs and Self-Employed Individuals in Germany

An entrepreneurial marriage is characterised by the fact that one of the two spouses, as an entrepreneur or self-employed person, generally earns significantly more than the other spouse. The resulting differences in the amount of the respective assets can then – depending on the chosen matrimonial property regime – be equalised in the context of a divorce. Our priority is to minimise risks for you and ensure a fair division of assets.

If the spouses live under the statutory matrimonial property regime of a community of accrued gains, the equalisation obligation for the entrepreneurial partner can be particularly severe. In this case, the spouse who has made a more significant gain during the marriage is obliged to pay the other spouse an equalisation payment of 50%. Such equalisation claims must be fulfilled immediately and in full after the divorce becomes final. In the worst-case scenario, this can mean that the business or parts of the company must be liquidated to fulfil the claims of the divorced spouse immediately.

However, even the conclusion of a prenuptial agreement is no guarantee of a smooth divorce, as prenuptial agreements also harbour a legal risk, especially if they do not fully comply with formal and substantive requirements and are contested as a result. Nevertheless, a prenuptial agreement in a business marriage is recommended and indispensable to protect business assets in the best possible way, define financial rights and minimise potential conflicts in the event of a divorce.

Before initiating divorce proceedings, meticulous preparation becomes crucial, especially for entrepreneurs and self-employed individuals dealing with the dissolution of a marriage. It is vital for entrepreneurs and self-employed individuals to anticipate potential challenges and secure their assets in advance. In an ideal world, those affected should communicate clearly with their spouses about the marriage breakdown. Documenting this communication through legal means, such as through a lawyer, helps prevent disputes regarding the duration of separation when filing for divorce.

Our experienced family lawyers provide entrepreneurs and self-employed professionals with invaluable guidance and protection. Our team advise on protecting business assets and interests, and understand the value of safeguarding  financial stability during the divorce proceedings, protecting the interests of the entrepreneurial client or self-employed individual.

For entrepreneurial clients and self-employed professionals, gathering a comprehensive overview of family and spouse assets is paramount. Such a step involves securing relevant documentation such as business records, financial statements, and asset documentation. It is therefore crucial for entrepreneurs to maintain meticulous financial records, including the past 12 months’ business income statements, the latest tax assessments, business accounts, investment portfolios, and pertinent loan agreements. They should also note that securing contracts about the business assumes significance in the division of business assets during divorce proceedings. Such contracts can include partnerships or shareholder agreements,

As well as financial records, entrepreneurs and self-employed individuals should secure their property-related documentation, including rental agreements, mortgage or loan documents, and proof of deposits. All these documents can play a significant part in the divorce settlement. Additionally, entrepreneurs and self-employed individuals may need to consider revoking any power of attorney granted to the spouse for business or financial matters. This step may be advisable to protect business interests and financial security. At Schlun & Elseven Rechtsanwälte, our divorce law team will advise you on how such steps apply to your case.

For entrepreneurs and self-employed individuals seeking divorce in Germany, understanding the legal intricacies becomes pivotal. German law stipulates specific conditions for divorce, especially concerning failed marriages and living arrangements.

Proving a Failed Marriage: In German law, divorce is permissible only if the marriage is deemed to have failed (§ 1565 para.1 BGB). This failure is evident when the marital partnership ceases to exist, and there’s no expectation of its restoration (§ 1565 para.2 BGB).

Living Separately: Notably, living apart is a significant factor indicating a failed marriage (§ 1567 para.1 BGB). It establishes the breakdown of the partnership, especially when one spouse desires divorce while the other wishes to salvage the marriage. However, legally proving a failed marriage requires incontrovertible evidence, typically three years of living separately (§ 1566 para.1 BGB).

Exceptional Circumstances: In exceptional cases, the three-year separation rule can be disproved, allowing for an earlier divorce, albeit with detailed presentation and legal representation in court. However, departing from the shared home must be deliberated thoroughly, particularly for entrepreneurs and self-employed individuals. This decision carries substantial consequences, especially concerning child custody and residency rights.

Implications for Shared Property: Leaving the shared home without careful consideration can impact property rights. In cases involving entrepreneurship or self-employment, the question of property use arises. Departure without a clear intent to return can irrevocably relinquish rights to the shared property. Seeking legal counsel from German divorce lawyers is essential before making this decision, especially considering the potential impact on business or financial interests.

For entrepreneurs and self-employed individuals dealing with divorce, strategic decisions regarding living arrangements and shared property carry significant implications. Seeking legal advice and understanding the nuanced legal framework becomes crucial to protect both personal and professional interests during divorce proceedings.

Although a divorce is primarily a personal matter, it also impacts the development and stability of a company, especially for entrepreneurs and self-employed people whose private and professional lives are closely intertwined. It is essential to reduce these effects to a legally permissible minimum with the support of experienced lawyers.

Financial burdens are one of the common challenges that entrepreneurs face in a divorce in Germany. Financial obligations such as the division of assets, settlements, or alimony payments can affect the financial stability of the business and limit the availability of capital for operating expenses or investments. These restrictions can also affect the company’s ability to capitalise on growth opportunities or overcome unforeseen challenges.

In addition, disputes over ownership and control, especially when both spouses are involved in the business, can significantly impact day-to-day operations. Unclear ownership rights or disagreements over management decisions can lead to delays in important business matters, hinder innovation, or cause internal conflicts between employees or stakeholders. Resolving such disputes amicably or in court is critical to business continuity and avoiding delays in decision-making.

The valuation of the business is another critical aspect of a business divorce. Accurately determining the value of the business is often complex and can lead to disagreements that can disrupt the divorce proceedings and jeopardise the business’s growth prospects. Differing assessments of the company’s value can lead to negotiations or legal disputes, which can delay the conclusion of the divorce proceedings. At Schlun & Elseven Rechtsanwälte, our legal team supports you in this regard and conducts a comprehensive due diligence review for your company, based on which your asset value can be determined.

With our extensive experience in German family, tax, and commercial law, we can provide you with comprehensive advice on the financial consequences of a divorce and ensure that your rights and interests are optimally protected.

A legal dispute is not always the best solution. In such cases, an out-of-court settlement can ensure a cooperative solution to the conflict, significantly reducing the time, financial, and emotional burden for all parties involved. However, if the circumstances require a legal dispute, our experienced lawyers are ready to support you. Our many years of experience in family and business law enable us to develop a clear and well-founded strategy, even in complex cases.

Prenuptial agreements (prenups) generally stand as important legal tools that offer protection and certainty in marriages. However, prenups are essential for entrepreneurs and self-employed individuals entering into marriage as they can safeguard assets, outline financial rights, and mitigate potential conflicts in the event of divorce. Entrepreneurs and self-employed individuals without a prenup (or “marriage contract”) take unnecessary risks.

For entrepreneurs, their business is an essential aspect of their being. It is more than a job or a source of income; it is also a lifetime project, a passion, and involves extraordinary dedication. A prenuptial agreement provides a safeguard by clearly defining the status of the business as separate property, safeguarding it from being subject to division in the event of divorce. This shield ensures the business’s continuity and integrity despite the marriage’s dissolution.

Prenups allow individuals to outline the division of property and assets acquired before and during the marriage. This is relevant for self-employed individuals with significant assets or those expecting future growth in their business endeavours. Delineating separate property and marital property helps prevent disputes and uncertainty during divorce proceedings.

Entrepreneurs and the self-employed often have fluctuating income streams and investment portfolios. A prenuptial agreement can establish guidelines for dividing income, investments, debts, and other financial considerations. Such clarity minimizes the potential for financial disputes and ensures a more straightforward resolution in the unfortunate event of divorce.

In cases where both spouses are involved in a business, a prenup can outline procedures for business continuity in the event of divorce. It can establish protocols for the transfer or buyout of a spouse’s interest in the business, allowing for its uninterrupted operation. It also acts as a means to protect the company’s intellectual property. Entrepreneurs often possess intellectual property rights crucial to their businesses, such as patents, copyrights, or trademarks. A prenuptial agreement can expressly protect these valuable assets, ensuring they remain under the exclusive ownership and control of the creator.

At Schlun & Elseven Rechtsanwälte, our lawyers offer guidance about prenups in Germany. Our team will outline what is permitted under German law and examine current prenups to determine their legal enforceability. We are also prepared to draft a comprehensive agreement tailored to individual needs and ensure compliance with legal requirements. A carefully crafted prenuptial agreement can provide entrepreneurs and self-employed individuals a level of security and certainty, offering peace of mind amidst the uncertainties of marital life.

Our German family and corporate lawyers have extensive experience handling divorce cases in a business context. Our cross-industry orientation enables us to tailor our strategies precisely to our client’s individual needs and goals. Thanks to our cross-jurisdictional expertise, we can provide our clients with targeted support in protecting their personal and business interests. Such legal advice guarantees the best protection for your business and personal assets during the divorce proceedings. We endeavour to understand the specifics of your individual situation so that we can tailor our strategies to your specific needs and goals.

For this reason, we place particular emphasis on open communication and cooperation with our clients and ensure that you are actively involved in the decision-making process by providing you with clear explanations and guidance at every stage of your divorce proceedings.

Our team advises you on amicable solutions and their feasibility. Our experienced family lawyers specialise in negotiation and collaborative approaches to facilitate amicable solutions. We aim to resolve disputes and reach out-of-court settlements by encouraging open communication and advocating for a fair compromise. However, we recognise that amicable settlements are not always possible, so we are prepared to represent our clients in court. We fully protect your interests and rights by providing solid representation and strategically guiding you through the complexities of litigation.

In addition to high-quality expertise and outstanding service, our firm offers the compassion and unwavering support you deserve at this emotionally challenging time. Rely on the experience of our family law specialists to find a fair and workable solution. Contact us today to arrange a confidential consultation. We are here for you.