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Self-care and development

Sports Law Clinic FAQs – Family

The Sports Law Clinic team have been working hard to answer your frequently asked questions when it comes to sports coaching and the law

Welcome to the Sports Law Clinic FAQs Family advice page. Be sure to browse our other FAQ pages for Commercial, Property, and Litigation. Links at the bottom of the page.

A. Pre-nuptial agreements are becoming increasingly popular. They can be used to set out the settlement terms in the event of separation prior to a marriage, or what assets should be ring-fenced for one party, including business interests. It’s much easier to discuss a settlement amicably whilst on good terms, rather than following what could be a difficult separation.

It is important to note that strictly speaking, pre-nuptial agreements are not automatically binding, and there are certain criteria that the Court would consider when assessing whether its terms are applicable or not. It’s recommended to seek specialist legal advice in that respect. 

A. Yes! It’s a common misconception that couples who live together have additional rights in the event of separation. However, this is incorrect. Married couples have an assumed right over the assets held by the other, whereas unmarried couples do not obtain any interest. It would be very difficult for anyone unmarried to assert such an interest unless expressly agreed. 

A. Small businesses are usually looked at by the Court in two ways:

  1. Do they have a capital value and/or are they a stream for income? 

A lot of small businesses, including coaches, may work for themselves with no employees, in which circumstances it is unlikely the business has any capital value and the money received instead is treated similarly to any other income. 

  1. If the business is larger/ more profitable, it may be seen to have a capital value which would need to be confirmed for the purpose of settlement (either by mutual consent or a formal valuation). The Court may then need to look at various issues concerning the business, including its liquid capital and the impact a sale could have on the owner’s own income. 

It’s recommended to seek specialist legal advice in that respect. 

A. Although the Court has the power to order the sale of the business (or a share of), this is usually the last option that the Court wants to consider and instead will try to offset its value against other assets of the marriage, such as equity in the marital home.

A. The Court’s preference when considering settlement is to ensure a clean break between the parties, meaning no lasting financial ties. It will therefore often look to see whether an agreement can be reached whereby the spouse’s shares are sold back to the business or spouse as part of the settlement. The Court can order their sale or transfer if required. 

We often find that for tax purposes, spouses are provided shares in a business. If you are having such discussions with your accountant or other professionals, it’s always worth raising what may happen in the event of separation and to consider whether this can be factored into a shareholder’s agreement. 

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Related Resources

  • Sports Law Clinic FAQs – Commercial

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  • Sports Law Clinic FAQs – Property

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  • Sports Law Clinic FAQs – Litigation

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