Entrepreneurship is not for the faint of heart. To build a successful business, one that not only survives the economic ups and downs, but one that thrives is commendable. If you’re getting a divorce and you’re a business owner or married to one, surely, you’ll be curious about the future of the business.
For many business owners, the business is their most valuable asset so it’s only natural for entrepreneurs to be protective about their business in a divorce. If you have a business and it is not protected by a prenuptial or a postnuptial agreement, more than likely the business will be treated just like any other marital asset in the divorce. Meaning, the business could be treated the same as the marital residence, the IRA accounts, the bank accounts, etc.
The Fate of the Business
Let’s say your business is a valuable asset. In a divorce, your options may include selling the business and dividing the proceeds with your spouse, trading the business for another valuable asset, such as a retirement account or the marital home, or continuing to co-own the business with your ex, even after the divorce is final. For the purposes of this article, we’re going to expand upon the third option: co-owning the business after the divorce.
Perhaps you built the business from the ground-up and it’s a huge part of your identity and you have zero desire to sell it. Or, perhaps you’re so attached to your “employee family,” you can’t imagine walking away from them.
Or, perhaps your spouse is intimately involved in the business and he or she is important to the company. In any of these scenarios, perhaps walking away from the business or selling it is difficult to fathom. If you can relate, you may want to consider continuing to co-own the business with your spouse despite the divorce, but is this possible? It depends on your relationship with your ex and your personalities.
Are you having a collaborative or an acrimonious divorce? Can you and your spouse stand being in the same room together? Can you set your differences aside for the sake of the business? Or, is it like World War III when you’re together because one or both of you are harboring a lot of resentment about the breakup?
If you are having good communication with your ex and you can get along, you may want to consider keeping the business and continuing to run it together after the divorce. If you two can manage to get along, you may not need to sell your business or one of you may not need to buy the other out of it at all. If you’d like to explore this option in further detail, we invite you to contact Kaplan Law, L.L.C. for a consultation.