During the property division phase of your divorce, you and your soon-to-be ex-spouse will split your assets in as equitable a manner as possible.
But how do you split a family business? This may be the most valuable asset you have and there are three basic options to consider concerning the disposition.
1. Sell the business outright
Some divorcing couples feel that putting the business on the market is the most sensible alternative. First, you will need to engage the services of a professional appraiser to perform a valuation so as to determine the appropriate asking price. Keep in mind that the two of you may have to continue working together until the business sells, but when it does, you can split the profits.
2. Initiate a buyout
Perhaps your spouse is not as emotionally attached to the business as you are. In this case, you could consider performing a buyout. Once again, you will need an appraised value before proceeding. If the funds for the buyout are not readily available, you might agree to an exchange of assets that are comparable in value.
3. Keep the business as co-owners
If you and your spouse anticipate an amicable divorce and neither wants to part with the business, the third option is to continue as co-owners. If you believe you can go on working together, this would likely be the simplest solution. An expensive valuation process will not be necessary, and you would each retain your personal stake in the company. In any case, the disposition of an asset as important as a family business takes considerable thought. You can rely on your attorney’s guidance on the best way to go about this matter as you approach the property division phase of your divorce.