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What happens to a family business in divorce?

| Aug 5, 2020 | Firm News, Property Division

When you and your spouse got married many years ago, you never dreamed that your marital bliss would end in a divorce. Since your children are grown and on their own, your primary concern is what will happen to your business.

The business has been in your family for generations, and it is your pride and joy. After all, you have dedicated your entire career to the company. Fortunately, you may be able to keep your business afloat.

3 ways divorce may affect your business

Of course, each divorce situation is different, but there are three common bumps in the road that many business owners encounter when going through a divorce.

1. Attention is taken away from your business. While you are going through the divorce process, you may have meetings to attend. You will also have to pull together some documents for the valuation of the business, which may take time away from your day-to-day business operations.

2. You must consider how you and your soon-to-be ex-spouse will share the business. Will you buy them out? Will you two continue to work together, as usual? Will your spouse be willing to hold a share of the company but allow you to run the business alone?

3. Under rare circumstances, you must sell the business. Most of the time, business owners are able to keep their business, but occasionally, a myriad of problems forces the owner to sell. If you cannot afford to buy out your spouse or manage it on your own, there’s a possibility the business may flounder.

Thankfully, mediation or collaborative divorce may make splitting a business easier than the traditional divorce litigation route. In a collaborative divorce, both spouses retain an attorney to represent them. The attorneys work together to create a solution that both spouses can agree upon.