How Can Spouses Who Are Co-Owners of a Business Handle a Divorce?
When two spouses both put their heart and soul into making a business succeed, it can be a personal and professional accomplishment. However, if the couple decides to divorce, the co-ownership of a business can make matters more complicated. A trusted divorce attorney can help you through the complex process of handling your business during a divorce.
Steps for Business Owners During a Divorce
Before any decisions are made, it is necessary to have a financial expert determine the value of the business. There are different methods for finding the value. It can depend on which type of business you own to find the best way. Each spouse may bring in their own experts who may need to reconcile if they come to different values. Other complicating factors include if one spouse had started the business themselves, with the other later joining in, including if the business was started by one spouse before your marriage. In this case, some share of the business may be considered separate property and not subject to division.
Once the value is determined, you and your spouse have three basic options for approaching the handling of the business during your divorce. These include:
Selling the business – It can be difficult to walk away from a company that you may have founded or helped to grow. However, selling a business to willing buyers has the potential for you and your spouse to divide the profits and use the proceeds to begin building your new post-divorce lives.
One spouse buys out the other – If one spouse feels more strongly about keeping the business going, they can agree to either purchase the other spouse’s share through a cash payment or fully or partially exchange their share for other marital assets that would otherwise be divided. These can include the marital home, other property, or investment and assets.
Remain joint owners – If your divorce is not contentious and you believe that you can still work together as business partners even if you are no longer married, then you can both agree to remain in business together. While you may not have had an agreement over your partnership during your marriage, in this scenario, it is a good idea to establish one after your divorce.
Though some spouses have reservations about signing a prenuptial or postnuptial agreement, they can be great tools to determine which share of a business’s assets belong to each spouse.
Contact a Collin County Divorce Lawyer for Business Owners
Business owners can find divorce an even more difficult process to navigate given the complexities that involve the division of marital property and their business. The experienced Plano divorce attorneys of Law Office of Brian Bagley can help you through the complicated process and provide you with the options and representation you need. Call our office at (972) 843-7158 or email us for a free consultation.