During your marriage, you may have accumulated significant wealth through the hard work you and your spouse put in building and operating the family business.
When you divorce, you will break up the family unit. But does that mean breaking up the family business as well? There are three basic options to consider.
1. Sell the business outright
Perhaps the first option that comes to mind is to put the business on the market. You and your spouse can split the profits and enjoy a fresh start after the divorce is final. You will first need to have an appraiser perform a valuation to determine the worth of the business so as to arrive at an appropriate selling price. Keep in mind that the business might not sell quickly, in which case you and your spouse may have to work together longer than anticipated, which could be awkward.
2. Perform a buyout with your spouse
You could also consider purchasing your spouse’s share of the business. If you manage day-to-day operations, oversee finances and make major decisions, you are probably more emotionally and financially invested in the business than your spouse is. If a lump sum is not available, you could discuss a payment option or an exchange of assets with a value equal to that of the business during the property division phase of the divorce. Again, you will need a valuation.
3. Maintain the business as co-owners
The third option is to keep the business and continue as co-owners. This is not possible for all couples, but if you and your spouse anticipate an amicable divorce, continuing as co-owners could work. Your divorce attorney can help you make the best decision concerning the fate of your family business.
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