Perhaps you and your spouse own a family business. Now that you have decided to end your marriage, what will happen to the company?
The family business may be your most important asset, whether you founded the company during your marriage or continued to add to the success and value of a business that was already up and running before you walked down the aisle. The fate of that business due to the impending divorce will be an emotional but particularly important decision for you and your spouse to make.
Here are three options to consider as you face the property division phase of your divorce.
- Put the business on the market
You and your spouse might agree to sell the business outright and split the profits. First, you must have a business appraiser perform a valuation in order to determine an appropriate selling price. This is an expensive process, and you may save money by hiring just one appraiser and splitting the cost. Keep in mind that if the business does not sell right away, you will have to work with your soon-to-be-ex longer than planned.
- Perform a buyout with your spouse
You will also need a valuation if you decide to buy your spouse’s interest in the company or vice versa. If funds for the buyout are not available, you could consider using other assets of like value in exchange for the business.
- Continue as business owners
If you and your spouse believe you can go on working together once the divorce is final, continuing as partners might be the best option of the three. You would retain your respective interests in the company, and you would not have to go to the expense of having a valuation performed. This solution does not work for all couples but depending on your ability to maintain an amicable business relationship, continuing as co-owners is an idea that is worth considering.