Divorce is never an easy process. But for those who own and run a family business with their spouse, the separation can be even more difficult.
If you foresee a divorce in your future, or you are in the middle of one right now, you might be wondering what will happen to the family business.
Whether you continue to co-own the business or sell it, there are many factors you should consider. Here are a few tips for family business owners who are going through a divorce:
Set Aside the Emotional Baggage
The very first step to deciding what happens to the family business is to set aside any emotional baggage associated with the divorce. Even though your personal life may be facing disruption, your goal should be to manage any business issues as professionally as possible.
Ignoring your professional obligations can be a recipe for a disaster with the potential to financially devastate both parties.
Acquiring the help of a divorce attorney and a business attorney can help you make the best decisions to protect your investments and livelihood.
Understand Your Options
There are three main ways you and your spouse might handle your business after the divorce:
Remain coworkers: If you and your ex are in an amicable relationship, and you still care about the business you’ve created, there is no reason you can’t remain coworkers. There will still need to be a legally documented division of assets, but the business operations can remain similar to how they ran when you were married.
One spouse buys out: Sometimes, divorced people feel it will be too painful or difficult to continue working with their ex. It may be easier for the business to be split and fully run by one person. In these cases, one spouse can buy out the other, reimbursing them for the investments they’ve made.
Sell the business: If neither party wants to continue running the business, it may be better to sell it. An evaluation will be needed to determine how much it is worth. Keep in mind though, depending on the business, finding a buyer may take years.
Assess Both Your Involvement in the Business
Not all couples share an equal part in the ownership and operation of a business. For example, if the business was established before the marriage began, it will not be considered a marital asset, and will not need to be divided.
But if it was started during your marriage and you run the business together, you may need to make some tough decisions.
Assess which spouse, if any, is more involved in the day-to-day operations. If there is one partner who has more control of the business, it might make most sense for this person to continue running it.
If an agreement can’t be made, you can take the division to the courtroom. A judge can help decide the most equitable and reasonable division of the business, but the process is lengthy and often feels impersonal.
Contact a Maryland Divorce Lawyer Today
Working with a divorce lawyer from the very beginning can help you navigate your options and operate your business as seamlessly as possible.
The Law Offices of Sandra Guzman-Salvado are committed to finding amicable solutions for divorcing business owners in Maryland. And if the separation has to go to court, we are ready to fight for what you deserve. Contact us today to schedule a consultation!