When married business owners decide to divorce, the process can be complex and involve various legal, financial and practical considerations. Plus, there is a good chance that the business itself is one of their most valuable assets.
When couples craft prenuptial or postnuptial agreements, they may have already made decisions about what will happen to their business in the event of a divorce. But if there is no documentation in place, that decision has to be made when they get divorced. If you are in this situation, here are three options that may be particularly worth considering.
One person takes over
You may find yourself in a situation where one person wants to stay at the business and the other person wants to sell it. For example, maybe you want to continue running the business, but your ex is no longer interested in being part of it after the divorce. You may have the option to buy your ex’s share in the company. This is typically done by trading your interest in other marital assets or making a financial purchase, perhaps with a business loan or another investor.
Both people walk away
Of course, you always have the option to sell the business and then you can both go your separate ways. In that case, your biggest challenge may be finding a third party who can buy the business for what you believe it is worth. You can then manage the proceeds of the sale within the broader context of dividing the value of your marital estate.
Both people stay at the company
Finally, you do have the option to simply continue to work together. You may not be a married couple anymore, but you definitely can be business partners. If you decide to do this, it may be wise to create a partnership agreement. Once your marriage is over, you’ll want to have documentation to legally define your relationship, your ownership percentages, your roles within the company and things of that nature.
As you can imagine, getting divorced as business owners is complicated. It’s important to consider all of your options and the legal steps that you can take. Seeking legal guidance is a good way to get started.