When a couple is trying to navigate their way through a divorce, there are many different challenges they need to address. Of all the areas of divorce, property division can be the most difficult for couples, especially for business owners. When the outcome of the family business can also impact the livelihood of both spouses, it is important to know how a divorce can affect a business. If you are a business owner facing divorce, here are the primary outcomes you can expect:
Co-ownership
Divorced spouses can maintain their ownership of a company after divorce. While the ownership may not have changed, the dynamic of ownership might. One spouse may decide to step back from a leadership role and only collect their income while letting their ex-spouse run the business.
Buyout
If one spouse is committed to keeping their share of the company and the other is not, a buyout may be possible. The purchase can happen with an exchange of money, or the buying spouse may be able to negotiate for a trade during asset division, such as exchanging the vacation home for the business. In any case, a business valuation is necessary to confirm the company’s monetary value.
Total sale
If neither spouse wants to keep their stake in the company or cannot agree about how one spouse may buy it, selling the business entirely may be the best option for everyone. After they get a company valuation, they can divide the income from the sale during the property division portion of their divorce.
Pursue the option that is right for you
While there are many outcomes a business can experience in a divorce, you have a say in the outcome your business results in. Consult with your divorce lawyer about what option best suits your needs and what you can do to achieve that goal. Your attorney can offer you the guidance you need to secure the best possible outcome for you and your business in your divorce.
