What will happen to the family business in your divorce?

On Behalf of | Jul 25, 2019 | Firm News

Perhaps you and your spouse have decided to end your marriage, but how will that decision affect your ownership of the family business?

Here are three options to consider as you approach the property division stage of your divorce.

1. Engage in a buyout

Ownership of the family business passed to you and your spouse shortly after you married. Since then, the business has prospered due to the hard work both of you have put in. Still, your spouse has more day-to-day involvement than you do. If he has an interest in buying you out, you may agree. The first step is to hire a business appraiser to determine the business’s value. After establishing a value, your spouse could make a cash buy-out. If he does not have the funds, you could accept certain other assets in exchange for the business.

2. Sell the company

Another option is to put your business on the market. Again, you will need a valuation to determine a fair price. Keep in mind that if the company does not sell for a while, you and your soon-to-be-ex-spouse will probably have to continue working together until a new owner takes over.

3. Continue as business partners

Yours may be an amicable divorce. If this is the case, and if you and your spouse believe you can continue working together, you may consider continuing as partners in the company. This would save you the expense of having to obtain a valuation, and neither of you would have to sell your respective portion of the business.

How to proceed

Given the impending divorce, you will want good advice about the disposition of your business, no matter which option you choose. An attorney, a CPA and a financial advisor will work in your best interests and help you make the appropriate decisions about your company’s future.