Many couples are both partners in love and in business. But not all partnerships last forever. If you and your spouse are reaching the end of your marriage, you might worry about what this will mean for your business as well.
Every divorce goes through a process of dividing marital property. Marital property includes any assets you and your spouse accumulated during the length of your marriage, such as your home, furniture, and potentially your business. A business can be marital property if you and your spouse were both equally involved in its success and benefited from its profits.
Even if your company started in your name before your marriage, if your spouse later joined the staff or used profits from the business, he or she can claim part of the business in the divorce. If you do not have a prenuptial agreement that already protects your business from property division during a divorce, then you will have to figure out the next best course of action.
There are three choices for handling your business in a divorce:
- Buy-out your spouse. If you’re proud of your business and want to continue as is, you can buy-out your spouse’s share of the company. Or, you can offer a fair-value trade of a different asset. For example, you can let your spouse keep the family home while you keep the company.
- Sell the business and split the profits. As you go through the divorce process, you might come to realize you no longer want to keep your business. If you and your spouse agree on this solution, you can sell the company to a third-party buyer and divide the profits evenly.
- Keep the business together. It might sound challenging to work together with your spouse after a divorce, but some couples make better business partners than romantic ones. If that’s the case, keeping the business might be a possible option.
Going through a divorce is challenging enough, but with a business to consider, the stakes can be even higher. It’s essential that you review every detail before committing to a decision. Keeping an amicable relationship with your spouse can also help you both reach an agreeable outcome.
And if you find yourselves still unsure of how to proceed, consulting with a knowledgeable divorce attorney can help you make the right choices to protect yourself and your business.
