Divorce involves making many different decisions involving property and finances. The goal in any divorce is to achieve an equitable division of property, meaning that both you and your spouse receive an adequate share of marital property.
Houses, cars, bank accounts and retirement accounts are common examples of marital property. Your property division becomes more complex if there is a business involved that must be divided.
Have an appraisal done first
Before making any decisions, you should have the business professionally appraised by a third party.
The appraiser should be someone neutral who is not chosen by you or your spouse. Your divorce attorneys are likely to have some recommendations for business appraisers that can be trusted to provide an unbiased appraisal.
One of you keeps the business
Once you have a value that you agree on, your next step is deciding how to split the business. You or your spouse can agree that one of you keeps the business and buys out the other spouse’s business interest.
There is no law regarding which spouse keeps a business. However, generally, it is the spouse who actively runs the business.
What if I can’t afford the buyout?
If you are keeping the business but cannot afford to buy out your spouse’s share, you have options. Your divorce settlement can be structured however you want, provided you and your spouse agree to the terms and the overall outcome is fair and equitable.
Therefore, you can choose to buy out their share in small increments over time and incorporate this language and plan into your divorce settlement.
Running the business together or selling it
You and your spouse always have the option of continuing to run the business together. Think long and hard before choosing this option. Even if your divorce is amicable, running a business with someone you were once married to brings new challenges and can make it harder to move forward.
Selling the business and splitting the proceeds is also an option. This is best if neither of you have any interest in continuing to run the business. The selling process can take time, which can mean your divorce takes longer.
While you should consider what is best for your business, you should also think about what is best for you. Every situation is different, and your decision should be made with your distinctive circumstances in mind.