Divorce requires making many decisions, especially when it comes to the property division phase of the proceedings.
The fate of a family business becomes a focal point at this time. If you have no wish to put the business on the market, what other options do you have?
Buying out your spouse
You may want to consider buying your spouse’s interest in the business. You may have invested your time, energy and know-how in building the company and making it profitable. However, your spouse may have been the investor for the fledgling company and continued to put in funds as needed. If you want to perform a buyout, a valuation is the first step, so you must engage the services of an appraiser. If you do not have the funds for the buyout, your spouse may accept an even exchange of assets.
Continuing as co-owners
If you and your spouse are ending your marriage on an amicable note, you might consider continuing as co-owners in the business if you feel you can work together once the divorce is final. You would not need to incur the expense of an appraisal, and you would each retain your respective portion of the company.
Viewing the business as an asset
Keep in mind that during property division, your business is an asset just like any other from a legal and financial point of view. So if you decide on a buyout, you and your soon-to-be-ex are each entitled to your fair share. On the other hand, going forward as co-owners may present the best solution regarding the fate of your company.
