Divorce is not an uncommon thing and increasing in prevalence year after year. While there are a lot of emotions involved, there’s also a lot of paperwork and money involved, especially if one or both parties are business owners. When you find yourself in a situation where you’re considering divorce, learn your options as a business owner and what you can do to protect yourself.
Timing is Everything
Splitting and disbursement of properties are different in each state, so it’s always a good idea to check the specific laws in your state before filing paperwork of any kind.
If you were married before your business was founded, then your spouse could be eligible for up to half of the value of your business. On the other hand, if you started the business long before, the courts would only recognize the growth after the official date of matrimony.
Business Ownership Options When Filing for Divorce
Once you get past the initial stage of splitting things up, you’ll then have to think about your options for your business. In general, there are three ways to split the assets of the business, which you can find below. No two cases are the same and you should always consult your legal attorney as well as a Certified Divorce Financial Advisor (CDFA™) when deciding your best option.
- Buy-Out
One of the most common choices of dividing business assets, especially when a business is shared between husband and wife, is a buyout of one’s half. For instance, the courts will look at percentages and the amount of money tied into each and come up with an amount to buy the spouse’s half. In this case, you could buy out your spouse with a one-time fee and maintain sole ownership of the business.
- Co-Ownership
In this case, it depends on the relationship between the two parties and all the assets tied into it. In the case of co-ownership, the business remains partly owned by each former spouse, continuing things as normal. There are a lot of couples who can work together for the sake of the business and keep things strictly professional.
- Sell
Depending on the status of the business, this could be a great option if neither party can agree. If you find it difficult to come to terms and split things up, you could just sell your business. In this case, all the money received from the sale would be split evenly between spouses unless the courts decide otherwise.
You Have Options
When it comes to getting a divorce, no two couples have the same experience. Some get along really well while others want to take one another for everything they have. Whatever your case, know there are plenty of ways you can get and keep your business afloat, even in the event of a divorce. Sometimes, you must put your emotions aside and do what’s best for you, your spouse and the future of your business.
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