59 - When business and divorce collide

When Marriage Breaks Down: Protecting Your Business, Company and Family Trust Melissa Bush explains how relationship breakdown can expose business interests, company shares, trust assets, goodwill, and even notional property to scrutiny under the Family Law Act 1975, and why last-minute restructures can be reversed. Using the 2024 Federal Circuit and Family Court case Emmerton & Manwaring (No 2), she outlines how a common company-and-family-trust structure was undermined by poor governance: mixing personal and company finances, failing to meet director tax obligations (including DPN and Division 7A issues), mismanaging trust dealings (including unpaid rent), inadequate records and disclosure, and attempting voluntary liquidation mid-proceedings. She emphasizes that liquidation is not an escape and that lack of planning fuels costly litigation. Practical steps include a shareholders agreement, strict financial separation, proper trust documentation, staying current on BAS and super obligations, considering a binding financial agreement, and maintaining strong records. 00:00 Business at Breakup 03:34 What We Will Cover 04:12 Family Law Meets Business 06:20 Emerton Case Setup 08:46 Lesson One Structure Misused 11:05 Lesson Two Director Tax Traps 14:23 Lesson Three Trust Mismanagement 16:25 Lesson Four Records Disclosure 18:25 Lesson Five Liquidation Myth 20:44 Lesson Six No Exit Plan 22:57 Protective Steps Checklist 29:25 Key Takeaways and Wrap https://www.businessknowhow.com.au/blog/businessdivorce_0226