Special bookkeeping considerations: When divorce touches a family-owned business

Here’s a true-to-life case study: Let’s suppose that you, as a bookkeeping services professional, have a client named George, who is the owner-manager of a family-run restaurant. Working with George is his wife, brother, sister-in-law, a couple cousins and his teenaged daughter. While the business is going well, his marriage isn’t. 

After twenty years, George’s wife has decided to move out with their daughter. They also will be leaving the restaurant at the end of the summer. George’s wife has asked for sole custody of their daughter while she finishes school, as well as spousal support once she leaves the restaurant for good. He agrees with the arrangement and the divorce goes through.

Within two years, George has met someone new who has a young son, and they decide to become a new family. Meanwhile, business at his restaurant has been slowing down. He knows it’s just a slump, but it also means less money is coming in the door. This concerns George a great deal because he essentially has two families to support — his ex-wife and daughter, and his new wife and young son.

He definitely needs some help on how to better manage his business’ cashflow so that he can meet all his financial obligations.

As George’s professional bookkeeper, you’ve been able to help him with: 

• Basic Bookkeeping for Small Businesses
• Advanced Payroll
• Debt and Cash Flow Management
• Managerial Accounting
• Accounting for Business Growth and Transition

But now he needs additional help with tax planning. Knowledge Bureau’s Tax Planning for Corporate Owner-Managers, an elective course that is part of the DFS-Bookkeeping Services Specialist designation, will help you understand the different ways in which an owner-manager may draw compensation from an incorporated business to fund income requirements today and plan for future income. And with the recent corporate tax rate changes, one key issue facing owner-managers like George is how to best manage their compensation to maximize the amount of after-tax income available to the family.

This course will help broaden your understanding of the relevant tax changes and compensation planning options available for the family business and its family members. Then use your knowledge to implement Real Wealth Management™ strategies to help families accumulate, grow, preserve and transition their wealth over time with proper retirement investment plans.

To learn more about this 10-chapter course, visit the DFA-Bookkeeping Services Specialist™ page on the designation section of our website.

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