The strain of a divorce is usually an emotional time and an uncertain financial one. Even more difficult is the separation of assets for divorcing partners who own businesses together.
Statistics from the National Federation of Independent Business say one million businesses are co-owned and managed by married couples. How many of these businesses and marriages survive are not separately quantified. Business assets during a divorce settlement can often be the subject of conflict.
One suggestion legal experts make for married business partners who split is for one spouse to buy out the other’s share. Financial analysts and accountants can place a value on a business, so spouses can move to divide it based on an objective figure.
Distributions of business assets in a divorce are not always lump sum pay-offs, but can involve slower payments over time. It is to the advantage of both spouses to cooperate, some lawyers say, since the business will support both spouses in post-divorce life.
When there is no common ground between divorcing spouses who own a business, the ultimate equitable settlement may involve selling the entire business and splitting the revenue. Most financial advisors say this is an extreme choice for business partners headed to divorce court. Sometimes one partner may keep the business and the other keeps other assets.
Divorcing business partners have many factors to consider before making decisions about how to approach the division of their shared business. Some options may work better for certain couples than for others. When divorcing spouses have difficulty coming to an agreement, seeking experienced legal advice can be essential.
To learn more, call Lois Brenner at (646) 663-4546.