A family business is often in the spotlight during the property division phase of a divorce.
There are three options for you to consider in determining the fate of your business, and two of the three will require a professional valuation.
Perform a buyout from your spouse
If you wish to keep the business and maintain control, you could advance the idea of buying out your spouse’s interest. To begin with, you would need a professional to perform a valuation to arrive at an appropriate sales price. Buyouts usually involve paying the other party in one lump sum. However, you might also consider transferring assets of equal value or even setting up a payment schedule if your spouse is amenable to this idea.
Continue as co-owners
If you anticipate an amicable divorce, you and your spouse might consider continuing as co-owners. This does not work for everyone. However, if you and your spouse feel you can go on working together after the divorce is final, co-ownership is something to consider. It would be the easiest solution and would not require the expense of a valuation.
Put the business on the market
Keep in mind that if you owned the business prior to your marriage, the court may still consider it separate property. However, your spouse may have taken an active role in the business. In this case, and given that Massachusetts is an equitable division state, a judge will look at several factors in deciding how much your spouse should receive if you sell the business outright. Once again, you would need a valuation to determine the asking price. However, of the three options, putting the family business on the market is the one divorcing couples choose most often.
