A business takes a long time to get to a stable position. No matter how long you have been working to support your business and how many resources you put into it, a divorce can jeopardize it. Divorce proceedings can impact a business in several ways. By getting ahead of the matter, you can help yourself by preparing for your desired outcome.
Divorces that have a business as a marital asset can be extremely complicated. An experienced divorce attorney can help you through even the toughest problems, but the first step in settling the business matters is choosing which outcome you want to pursue.
If the business is marital property, both spouses own a portion of the total business. If one spouse does not want to maintain any company ownership, they can sell their share to the other spouse. Once both parties agree on a price for the business portion, they can proceed with the rest of the divorce.
When neither spouse wants to give up their portion of the business, they can proceed in their divorce while keeping their share. The dynamic of the ownership may change after a divorce, however. In some cases, an ex-spouse that previously had a lot of responsibility in the business may relinquish their involvement, and collect their share of the earnings. This change can leave the other ex-spouse with much more control over the company.
In some cases, neither spouse may want ownership of the business, or they may not agree on a price for a buyout. As a result, both parties’ best option may be to sell the business and divide the money from the sale. The amount that goes to each spouse may depend on the amount of the company they owned.
Consider your options
If you are considering a divorce, or are already in the middle of the divorce process, make sure you think about your business. Businesses typically see one of three conclusions in a divorce, and each outcome offers different benefits. Consult with an attorney to confirm what your best course of action may be.