When a divorce requires dividing up a family business, it can be a difficult process for the divorcing spouses. Divorcing couples who share a family business should be familiar with different options available to them for dividing a shared business in divorce.
One option for the divorcing couple is to sell the business and split the proceeds of the sale. Waiting on the sale of the business can sometimes delay the divorce process so that is one aspect of selling the business that divorcing couples should be prepared for. Another option is for one spouse to buy the other spouse out. If the spouse seeking to buy out the other spouse’s interest in the business lacks the liquid assets to do so, a settlement can be structured that can be paid over time.
When dividing a business during divorce, it is necessary to determine the worth of the business by obtaining an independent formal appraisal. If one spouse buys out the other, or the business is sold, it will be based on the appraisal. A final option is for both spouses to retain their interest and ownership in the business, however, they will both have to agree to work together and determine who will do what as they run the business together going forward.
The family law process can help guide divorcing couples through all the various aspects of their divorce and the property division process, including the division of a family-owned business. Deciding what to do with a business a couple has worked hard to build can be difficult which is why it is important for divorcing couples to be familiar with their options.