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Managing your business takes on new meaning in property division

| Jan 27, 2021 | Property Division |

You and your spouse may have taken over the family business some years ago or built a new business from scratch.

Now that you are facing the property division phase of your divorce, the task of managing your business takes on new meaning. Here are three options to consider in determining its fate.

List the business

Your first thought may be to put the business on the market. Once sold, you and your soon-to-be-ex can split the profits and become that much richer. In order to establish the appropriate selling price, you must first engage a professional appraiser to perform a valuation. Remember that if the business does not sell quickly, you and your spouse may have to work together longer than you anticipated.

Perform a buyout

You may provide the know-how for day-to-day operations and your spouse may work in the background perhaps keeping the books. As the business grew, both of you may have injected cash as necessary. However, one of you may be more personally invested in the company and might consider buying the other owner out. If funding is not available, the buyer can offer an asset exchange of similar value. Once again, an appraiser will have to place a value on the business so as to arrive at a suitable selling price.

Continue as co-owners

If you and your spouse believe you can continue to work together once the divorce is final, continuing as co-owners might be the best option of the three. Depending on your post-divorce relationship and how you carry out your respective duties for the company, you may find that keeping the business in the family is a workable solution.