To split assets during a divorce is complex enough without there being a business between you and your spouse. If you have a family business, however, you may find that it is even more complex to decide what to do with the company. Once your marriage dissolves, is it worth sticking around the company? What are your options?
A common decision for couples is that one keeps the business. The one who retains the business buys out the other partner. If one partner does not have enough liquid assets, then the two can come up with a structure settlement. In some cases, a company may buy one of the spouse’s shares.
This is not the only option, however, Forbes explains other alternatives to splitting the family business.
Can you both keep the business?
It is possible for both spouses to keep the business. This can be difficult if there are volatile emotions involved. If you can work amicably with your spouse, then this option may work. It can be hard for divorcees to move from married partners to business partners. To be business partners, the two of you always have to remain civil and professional.
Should you sell the business?
If you want to pursue new interests and your former spouse does not want to continue forward with the family business, then your best option may be to sell it. This allows you to both cut ties with the business and benefit from the sale. The biggest downfall is that it can lengthen the divorce process significantly. At the end, however, you have money from the sale.