Law Office of Bradley R. Tengler, P.C.

What will become of the family business after your divorce?

You probably thought your marriage would never end. However, now that you and your spouse are facing divorce, there are many decisions to make. Since you are also partners in the family business, one of the biggest decisions will involve the future of the company.

No matter the size of your company, it will probably be the focus of the property division phase of the divorce. What will become of it? Here are three options to consider.

1. Put it on the market

You may decide that the most logical plan is to sell the business and split the profits. In this option, the future holds promise in many directions. You could retire, start a new business or go into an entirely different type of work. If you decide to sell, you must obtain a professional valuation to learn how much the business is worth before you can arrive at an appropriate selling price.

2. Buy out your spouse

Perhaps you have invested the most time and effort in running the company and making it successful, while your spouse keeps the books and takes cares of day-to-day details. Consider buying your spouse’s share of the business. Once again, you will need to have a business appraiser perform a valuation so you can present a fair offer. If you are unable to come up with the cash needed for the buyout, you could consider using certain assets as a rate of exchange.

3. Continue as business partners

It is not unheard of for divorcing couples to carry on as partners in a family business. If your divorce is more amicable than contentious, and if you believe you can continue operating as business partners, this might be the best option. You would each continue to hold your shares in the company, and you would not have to shoulder the expense of obtaining a valuation.

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