What will happen to the family business during property division?

On Behalf of | Aug 22, 2022 | Divorce |

Perhaps you inherited the family business, or perhaps you and your soon-to-be-ex founded the company together.

Now that you face divorce, what will happen to the business during property division? You have three options to consider.

Sell the business outright

If you and your spouse are in agreement, you could put the business on the market and split the proceeds. First, you must engage the services of a professional appraiser to perform a valuation in order to determine an appropriate selling price. Remember that a prospective buyer may not come along right away. If so, you and your spouse may need to work together longer than you anticipated.

Buy out your spouse

If you are more emotionally involved with the company than your spouse is and manage the day-to-day operations, you might consider a buyout. To do so, you will once again need a professional valuation. In buying out your spouse’s interest, you have options. You could offer a lump sum, of course, but if the funds are not available, you could create a payment plan. Alternatively, you could offer your spouse assets to match the value of the business.

Continue as co-owners

If neither you nor your spouse is comfortable walking away from the business, the third option is to keep it and continue as co-owners. Understandably, not everyone can do this in a divorce situation. However, if your divorce is amicable and you believe the two of you could go on working together, then continuing as co-owners would be the simplest solution. Moreover, you would not have to go to the expense of having a valuation performed. Your attorney can discuss this and the other options with you and help you decide the fate of your business.

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