Dividing assets in a divorce is one of the most contentious issues in the entire process, especially if you own a business. If you own a business with your spouse, dividing it will include emotional as well as financial considerations.
Since the process of dividing a family business at divorce can be so overwhelming, many people in unhappy marriages choose to remain in them simply to avoid the potential financial implications. However, there are always solutions and strategies that can be applied to successfully avoid unfavorable outcomes when dividing a business. The following are potential ways that a family business can be divided depending on the circumstances.
The business is kept by one spouse
Perhaps the simplest outcome is when both spouses agree that the business should be kept by one spouse. It may be possible to reach this outcome if there are other significant assets to be divided. For example, if divorcing spouses own a vacation home as well as a business, they may agree that one will keep the vacation home and the other will take full ownership of the business.
The business is sold to another party
Many spouses feel that their business will no longer be able to function as it did before now that they are going through a divorce. As a result, they may decide to sell the business to a third party. In doing so, they will both get their fair share of the value of the business. Each spouse is, therefore, free to build a new business with the funds if they choose.
The business is kept by both spouses
If the divorcing spouses are still able to maintain an amicable and working relationship, they may decide to continue in their respective roles in the business even after the divorce has been finalized. This is a less common scenario, but it can be financially beneficial for all.
If you are worried about how filing for divorce will affect your business, it is a good idea to conduct thorough research before filing. The nature of your business and the roles that both you and your divorcing spouse have within the business will affect the outcome significantly. Being able to maintain a civil relationship with your ex will help you to move forward positively.