When it comes to the property division phase of a divorce, most people think of the family home as the most valuable asset. However, if you and your spouse own a business together, the focus changes.
What will happen to the company you worked so hard to build during your marriage? Here are three options to consider:
Sell the business
Perhaps the two of you feel that the most logical decision you can make is to put your business on the market and split the profits. You must first hire an appraiser to perform a valuation so that you know how to price your organization. Appraisals can be expensive, so the two of you may want to share the cost of engaging a single appraiser. If you have a profitable company and a significant client base, the sale may not take long. However, prepare for a worst-case scenario. If it does not sell quickly, you and your spouse may have to continue working together longer than you anticipated.
Perform a buy-out
You may be very attached to the business; you may have put more sweat equity into it than your spouse ever has. Therefore, your second option is to buy your spouse’s share. Once again, you will need the services of an appraiser to place a value on the company. You will also have to come up with the funds to make the purchase. If you cannot do that, consider using other assets that would represent an even exchange.
Remain business partners
If your parting is more amicable than contentious, and if you both feel that you could go on working together once the divorce is final, continuing as partners could present the most favorable solution. You would not need an expensive appraisal, and you would both keep your respective shares in the business.
Looking forward
Almost all divorcing couples dread facing the rigors of property division, and those who own businesses together experience more than a little angst. When considering your options about the disposition of the family business, there are many aspects to consider, but you can rely on legal guidance to help you make the right decision.
