Divorce and the Family Business

 Posted on March 29, 2018 in Family Businesses

Most people don’t enter into marriage with the expectation that they will later get divorced. Similarly, couples who start businesses together usually do not anticipate running into any obstacles regarding ownership and control. The reality, however, is that many couples who are also business owners will face complicated issues in the event of a divorce, so if you and your spouse are contemplating divorce and you both share an interest in a family business, we strongly encourage you to speak with an experienced high asset divorce attorney who can explain your legal options.

Retaining Co-ownership

Once a couple who owns a family business decides to get a divorce, they must start addressing the future of the company. For some couples, retaining co-ownership is a good option, especially for those who are deeply committed to their enterprise. However, it can be difficult to maintain a close working relationship with an ex-spouse, although many business owners are able to do so through careful scheduling and focusing only on the business aspects of their relationship.

This is a particularly attractive option for couples who no longer work in a specific location, but instead delegate day-to-day tasks to employees, as both parties can retain oversight without having to work together every day. In addition to being able to continue building a business that they are passionate about, divorcing couples who retain co-ownership also avoid the stresses of hiring an appraiser, valuing a business, and selling some or all of their interest.

Buyouts

Another option that is available to divorcing couples who co-own a business is for one spouse to buy out the other’s share of the business. Unlike the first option, this requires couples to hire an appraiser who is tasked with valuing a business, at which point, the spouse who wishes to retain ownership can either pay in cash or trade marital assets. In some cases, ex-spouses are even able to work out an installment payment plan, where the buyer makes payments over time.

Outright Sale

If both parties cannot come to an agreement about the fate of a family business or neither spouse wants to retain ownership, the best option may be to sell it to a third party and then divide the proceeds equitably. Like the buyout option, those who choose this option will need to use the services of a professional who can place a value on the business.

Call Today for Help with Your Divorce

If you are thinking about filing for divorce and own a business with your partner, there are a variety of options available to you. To ensure that you make a decision that is best for you and your family, please contact the talented Round Rock high asset divorce lawyers at Powers and Kerr, PLLC today.

Sources:

http://www.statutes.legis.state.tx.us/Docs/FA/htm/FA.3.htm

https://www.forbes.com/sites/lawrencelight/2016/03/07/when-2-business-owners-divorce-what-to-do/