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What will become of your business now that you face divorce?

On Behalf of | Dec 28, 2020 | Divorce

If divorce is in your future, your business will likely be the main focus in the property division phase of the proceedings.

You may have many questions about the fate of your business but there are three basic options to consider.

The buyout

The option many divorcing spouses use is the buyout, where one party purchases the business interest of the other party. In a 50-50 division, where the spouses have an equal interest, one will pay the other 50% of the value of the business or, if sufficient funds are not available, concede another asset equal in value to the business split.

Continued co-ownership

If ending your marriage is an amicable decision and you and your spouse believe you can continue to work together following the divorce, continuing as co-owners of the business may be in your best interests. If your relationship is less than friendly, one of you may want to become an absentee owner, which means that you can keep your distance from your ex-spouse but still receive payments according to the degree of ownership.

An outright sale

The easiest way for some couples to deal with the business is to put it on the market and split the profit. Keep in mind that it may take months to sell, which means that the two of you might have to continue working together longer than you anticipated.

A careful decision

Remember that whether you sell the business outright or engage in a buyout, you will need a valuation to determine the appropriate selling price. A note of caution: Take your time about determining the fate of your business. This is not a decision you can take to court and modify if you change your mind at a later date.

 

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