Divorce can often bring out the worst characteristics of those involved in a breakup. The process can be stressful and frustrating, even if you are using a highly qualified attorney. Imagine the difficulties that can arise, therefore, when a family attempts to distribute jointly-held business assets. Although your family business could be in peril because of your divorce, you do not have to sacrifice your assets simply because of a breakup.
The most important component of dividing the value of a business is deciding its fate. The couple could continue to co-own the business, even after divorce, if they believe this is a viable option. Alternatively, one owner could buy out the other’s share in the business. The entire business could also be sold, allowing the assets to be more evenly distributed.
After you decide the fate of your business, you need to determine its worth. Even if the venture is jointly owned, you need to know its value so you can divide property between spouses. You should be able to rely on shareholder agreements and other buy-sell documents related to your business. If you have not crafted these legal precedents, the asset division could be more challenging, but it is still possible. To find out how much your business is worth, hire a neutral professional.
Finally, you need to weigh the options, making the decision that would be best for the business, as well as its co-owners. To minimize the financial fallout, consider mediation rather than courtroom litigation. This process is less stressful and cheaper, often providing better results through cooperative bargaining. Remember also to stay focused throughout the entire negotiation; this property division will only occur once, and you want to make sure that your interests are represented.
If you are a business owner pursuing divorce, consider seeking the services of a qualified attorney. These professionals can help you decide on the best course of action for your business, allowing you and your ex to move on with your financial futures.
Source: blog.intuit.com, “How to keep divorce from ruining the family business” Sheryl Nance-Nash, Jun. 26, 2013
