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How can divorce affect the family business?

On Behalf of | Nov 11, 2021 | Divorce |

Getting a divorce is a complex process that can take months to resolve, if not longer. Even with the guidance of an experienced divorce attorney, you will still need to address complicated matters like custody agreements, child and spousal support negotiations, and asset division.

For spouses that also own a business, they have an additional challenge: dividing their company with their spouse. Even if a spouse owned the company before marriage, the wealth and value it accumulated during the course of the marriage might be considered marital property, which could give your spouse a claim to a cut of the business. When a business becomes a part of asset division, how can you expect to separate things?

Buyout

If you are looking to keep the company, you may be able to acquire your spouse’s share of the business. Whether you obtain the share through a purchase, or you negotiate for it during the rest of your asset division, it is possible to exit a divorce while still possessing your company.

Sellout

If you no longer want to maintain ownership of your business, and neither does your spouse, you could pursue selling the company entirely. After an accurate valuation of the business, you and your spouse can divide the income from the sale.

Co-ownership

If you and your spouse still wish to continue owning the company together, it is possible to continue doing so. While ownership may not change, the dynamic between owners may. One spouse may move back to a silent position and collect their share of the income while leaving the other spouse to run the business as they see fit.

Develop a plan you can follow

Before you begin discussing the future of your business after divorce, consult with your divorce attorney about what your best interests are and how to protect them. Let your lawyer know what you hope to accomplish in your divorce, and allow them to formulate a custom-tailored strategy to help you fulfill those goals.

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