Divorce for business owners and executives

Under the Zugewinngemeinschaft (community of accrued gains), the statutory regime, only the growth during the marriage is shared, and even of that only half the difference between the two gains (§§ 1373, 1378 BGB). What sounds like a lot at first often shrinks considerably once initial assets, latent tax and valuation margins are entered correctly.

The larger the assets, the more hangs on an imprecise calculation. Negotiating without reliable figures, or deciding under time pressure, risks either paying too much or straining the liquidity of the business. What is needed is an order of work that sorts the assets first and divides them second.

Every case carries its own figures; the patterns behind them are alike.

A business is usually valued by the modified capitalized earnings method, in most cases by an appointed expert. What counts is the value on the day the Scheidungsantrag (divorce petition) is served (§ 1384 BGB). Where operating results fluctuate, the timing of filing is therefore part of the strategy and not left to chance.

In practice a valuation report takes several months and therefore usually sets the schedule for the whole proceedings. Planning for that means not having to negotiate under time pressure later on.

For business owners and executives, a separation is not only private. What reaches the courtroom can touch business partners, fellow shareholders and your own reputation.

Three things work against that, and none of them is a promise; they are the law, or a question of the route taken. Everything you tell us is covered by legal professional privilege, from the first conversation on and also if no engagement follows. Family matters are not heard in public. And a settlement out of court keeps sensitive figures out of the proceedings from the start.

The costs follow the Verfahrenswert (value of the proceedings), which the court assesses from the income and assets of both spouses (§ 43 FamGKG). Court and lawyers bill under the statutory rules, so the figures can be followed and are not freely negotiated.

With larger assets the Verfahrenswert (value of the proceedings) comes out correspondingly higher. For the fees, that value alone counts, regardless of how hard the fight is. A discreet agreement out of court is therefore often the more economical route as well.

These cases are the reason the firm is set up the way it is. The asset side is handled by Dietrich Karcher, with over 30 years of civil law and years outside the profession, self-employed in property and as head of the property division at a Landesbank (regional state bank). He therefore also reads a valuation report by asking whether a bank would finance the outcome later.

The family law proceedings are run by Mieke Karcher.

The work starts with a confidential inventory of company, property, capital, income and any Ehevertrag (marital agreement). Depending on how complete the documents are, it takes a few weeks. Only once the figures are reliable does the decision on the route follow. You are under no obligation to hire us after the first conversation.