If you and your spouse co-own a business, figuring out what will happen to it after you get divorced may be one of the most important issues during the divorce process. When both spouses have a stake in the business it can complicate asset division. Fortunately, you have a few different options for equitably dividing your business in divorce. Discussing these options with your attorney can help you come to an arrangement that works for everyone.
Option 1: Co-Own
An less common-option for couples is to continue to co-own their business. This can work if your divorce is relatively amicable and you both are still determined to operate your business and if you both can come to an agreement about how you will continue to run the business. You may need to discuss the details at length, but this can save you time and effort in figuring out how to value the business.
Option 2: Buyout
Option two is more common, when one spouse buys out the other’s share of the business and takes over sole ownership of the business. This option can be less emotionally complicated, but it requires a valuation of the business in order to ensure an equitable deal. With this option, the spouse who takes over sole ownership can also opt to give the other spouse another piece of marital property that is of equal value, instead of paying for their half of the business.
Option 3: Sell
The third option is to sell the business entirely and split the profits equally. If you and your spouse decide it’s best to move on from the business, selling outright and dividing the profits is a relatively simple option in terms of the divorce process.
Handling a business can be a particularly contentious and stressful part of your divorce process since a business is a particularly large asset. It requires careful consideration and the help of several professionals in order for both parties to get a fair deal.
