Couples who decide to end their marriage through a divorce may wonder what property they can get once the divorce is finalized. What spouses can get will affect their financial future as a single person. If the couple owns a business, this can make asset division more complicated than it already is. So, if you are one of these spouses, it can help to gain knowledge to help you set expectations before you start the divorce process. This way, you can negotiate the best outcome for the business division during your divorce. A Sandy divorce attorney can help ensure your interests are protected. Whether you settle the divorce amicably or take it to court, your attorney is there to support you at every step of the process.
Creating Agreements to Protect the Family Business When a Couple Decides to Divorce
When a couple opens a business while they are married could have a postnuptial agreement in place, so they can have control over what happens to the business should they decide to divorce. This would save them time and money because the document presents clear terms to how the business is split and what every spouse gets. Another way to protect a company from litigation during a divorce is to make specific agreements. This includes having terms in a buy/sell agreement, a shareholder agreement, a Partnership agreement, or Articles of Incorporation. The terms depend on the setup of the company. Such agreements can be used if other parties own the business other than the spouses. This ensures the business can continue to operate and make profits after the divorce of the couple who co-own the business.
What to Expect in the Absence of any Agreement
When there is no agreement that applies to the business owned by a divorcing couple, the business is considered marital property. In this case, the business should be subject to equitable division. Before dividing the business, its value should be assessed first. If you are in this situation, your attorney can walk you through the complexities of this matter.
How a Family-Owned Business Can be Divided During a Divorce
A family business can be sold during a divorce. Selling may be a good option if one spouse cannot afford to buy out the share of the other spouse. Depending on the company’s health and the ability to sell the business promptly, a business sale can be a faster way to divide business assets. If one spouse has the financial resources, they can buy out the interest of their spouse in the business. Lastly, a new ownership agreement can be drafted if both spouses wish to remain co-owners of the business after their divorce.
