When a marriage ends and the couple owns a business together, the resulting dispute for ownership rights can get ugly. After all, a family business is considered property and thus can be subject to the equitable division of marital assets in a divorce.
Three Methods of Handling Your Business After Divorce
- Continuing to run the business with your ex-spouse through co-ownership. This can be difficult, especially in the case of a contentious break-up. Any hostility whatsoever between ex-spouses can not only affect them personally but could also lead to disaster for the business itself. Unless you have a completely amicable relationship following the divorce and a high degree of trust in each other’s business skills, it is not advised to try co-owning the business.
- Buying out your ex-spouse’s stake in the business. This can be done up front with enough cash or liquid assets or can be done by compromising on other monetary benefits such as home equity and retirement funds. It is also possible to enter into a property settlement note or structured settlement, which works like a loan with interest, a principal and a definite term to pay back.
- Selling the business and splitting the resulting funds. This option is nice because the two parties can take their own separate profits and use them to fund their own future investments without needing to deal with the ex. However, it can take a long time for a business to be sold, so for couples seeking here-and-now solutions, this one may be less than ideal.
Consult with a Skilled Lawyer in Aurora Today
Especially in the case of a closely-held family business, the process of deciding who keeps what can be emotionally draining. If you are seeking a divorce and are unsure of how to handle the family business, speak to a family law attorney. You can learn more about other considerations you may need to make during divorce through our divorce Q&A.