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Deciding how to settle your family business in the divorce

On Behalf of | Jan 9, 2023 | Divorce |

Family businesses are casualties of divorce more often than you might think. When you have built a business with your spouse and your marriage is ending, you might wonder what you should do about that business. How do you decide who retains the business or how much money each of you receives from it?

There are many factors to consider when it comes to the family business and your divorce.

Understand the company’s actual value

Before you can determine how to handle the business in the divorce, you must know what the business is worth. An independent business valuation will help you and your spouse understand the worth of the business, including what that worth means for each of you.

Consider the path you prefer for the business

You and your spouse must decide what you wish to do with the business in the midst of your divorce. If one party in the marriage is the active party within the business, he or she may wish to keep it. In those cases, he or she can buy out the other spouse’s financial interest.

In other instances, both spouses may decide to sell the business instead. In those cases, you can split the profit from the sale according to the financial interest that each of you has in the business.

Your family business is like any other asset in your divorce. Understanding the way to value and settle the business interests can prevent it from being a source of contention in the divorce.