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 Emerton & 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.shirelegal.com.au/blog/businessdivorce_0226