Ways to divide a family-owned business during divorce

On Behalf of | Apr 14, 2020 | Divorce

One of the more challenging aspects of divorce process can be dividing high-value assets including a family-family owned business. There are different methods of dividing a family-owned business that couples who own one should be familiar with.

Knowing the different options for dividing a family-owned business can help divorcing couples better anticipate how they want to divide their business and to plan ahead for property division process. One option is for one of the spouses to keep the business. This requires the other spouse to buy out the selling spouse’s interest in the business. The buy- out amount will be based on the appraised value of the business and if the spouse buying the other spouse’s interest does not have enough funds to do so, a structured settlement to be paid over time can be arranged.

Other options for dividing a family-owned business include the spouses agreeing to keep the business or the spouses agreeing to sell the business. If the spouses agree to keep the business they will need to be able to work together moving forward which makes this option less common and one spouse buying the other spouse out more common. The third option is to sell the business and for the spouses to split the proceeds of the sale. This can delay the divorce process and time is takes to reach a property division settlement agreement, however, while the couple waits for the sale of the business.

It is important for couples divorcing with a family business to be familiar with the different methods of dividing the business during divorce. It will help them better determine which option is best for them, their family and their situation.