LEGAL GUIDANCE THE WAY YOU WANT IT
Divorce and the family business: Proceed carefully
If you are planning to divorce, you could be facing months of difficult decisions and negotiations. This is especially true if, in addition to owning a house and having children, you and your husband own a business. Sometimes it can seem impossible to reach a decision when it comes to dividing the family business. Should you fight for sole ownership of the business? Should you sell it and divide the profits?
There are several different options available for your family owned business if you are facing a divorce. Here are three business strategies to choose from that might increase your chances of coming through divorce with your finances intact.
Depending on the status of your relationship with your soon-to-be ex-husband, the two of you might b able to end your marriage and still successfully co-own the business. If you can manage this, it could be your best option.
One of the benefits of choosing this strategy is that you each get to retain your respective investments in the business. Also, you will not have to spend additional money to obtain a valuation of the business to divide it as part of the divorce settlement. Depending on how complex your business is, a valuation can be very expensive. However, by choosing to remain in business with your spouse, you will have to maintain a solid working relationship.
Buy out your spouse
Another option you have is to buy out your husband. This will require the services of a business appraiser and additional negotiations. To buy out your ex, you can pay cash or work out installment payments. You might also be able to relinquish your share of other marital property.
For example, you can agree to let your husband keep the house in Lakewood or other real estate the two of you own in exchange for his share of the company. On the other hand, you can also choose to let your husband buy out your interest in the business if you no longer wish to be an owner.
Sell to a third party
A third option is to sell the company to a third party and split the profit. This will also require a valuation conducted by a business appraiser. If you can sell the business quickly, then you each will have money to spend however you like. For example, you can use the proceeds to start another company or perhaps make a different type of investment. However, if you cannot sell the business quickly, then you could end up working together for an extended period of time.
Divorce is often a complicated process that can become even more complex when assets such as a family business are involved. However, no matter the details of the property you and your spouse own, it is important to consider all of your options when planning for divorce and make a decision that will have the best possible benefits for you.