Whether you were the one to file for divorce or not, you may still be surprised about some of the unexpected consequences of a divorce. It can be hard to prepare for your divorce if you do not know what is coming. For business owners, property division may be one of the most challenging portions of their divorce.
When a married couple has many assets, it can result in a very complicated and costly process. You can help make things easier for all parties by deciding on which of the three outcomes you would like for your business and building a strategy to secure that result. Here are the three common outcomes of businesses during a divorce to help you begin planning:
If both spouses which to keep their share of the company, they can continue doing so. While the ownership may not change because of divorce, the business dynamic might. In many cases, one spouse may decide to become something of a “silent partner” and collect their share of the income while avoiding any of the decision-making.
If one spouse does not want to stay in business or is willing to sell their share for the right price, a buyout occurs. For a buyout to occur, the spouses will need to get an accurate company valuation before negotiations start. The purchasing spouse often pays for their share during the rest of the property division, such as giving up their share of the family home in exchange for total business ownership.
If neither spouse is interested in keeping their portion of the company or cannot come to a purchase agreement between them, they may come to the remaining option of selling the company and splitting the income from the sale. Like a buyout, this option will also call for an accurate valuation in order to get a fair price for the company.
Prepare for your goals
If you are facing a divorce or plan to be soon as a business owner, consult with a divorce attorney right away. Their guidance can help you develop a strategy to meet your goals, protect your assets, and move into the next chapter of your life with your best foot forward.