If you and your spouse have a private business and you are divorcing, you will have to figure out how to handle it before your divorce becomes final. The American Bar Association reports that before dividing business interests, you must determine what is marital and separate property. This can be complex as even property owned before the marriage may have increased in value due to joint effort or become commingled with marital assets.
Once you know how much the business is worth and how much is marital property, you may decide to move forward in one of several ways.
By selling the business
It may be easiest to sell your business so both you and your spouse can make a fresh start. You may then split the profits you make on the sale between you.
By buying out your ex or vice versa
If you or your ex wishes to keep the company and has the capital needed to do so, the party who wants to keep it may be able to buy out the other’s share in the business. Liquidating some assets or applying for a loan may also be options for capital.
By continuing to serve as co-owners
You and your spouse may be one of those rare couples who decide to move forward with running the business cooperatively. Keep in mind that this type of arrangement may lead to emotional or psychological complications and is not right for everyone.
While these options outline ways you may be able to split business ownership interests in your divorce, you may need to take additional steps if there are other issues at play, such as debt or third-party interests.