Getting divorced as business owners can make things much more complicated. Many businesses are jointly owned by two partners, who may not even have a partnership agreement in place. As long as they were married, they assumed that things would work out smoothly.
But in a divorce, this means that the business is a marital asset and is subject to property division. There are three basic options couples can utilize at this time.
Drafting a partnership agreement
First, they can create a partnership agreement and continue to work together. Just because two people get divorced does not mean they have to change their professional relationship. For couples who are still on relatively good terms with one another, this may be an easy solution.
One person exits the business
Another option is for one of the partners to leave the company. The other person then buys out their ownership share. If the business is worth $500,000, for example, they may have to exchange other marital assets or directly pay their spouse for their share of the company, which may be $250,000.
The couple sells the business
When it is too expensive to buy the other partner out, the solution is sometimes that the couple just sells the business for whatever it is worth on the open market. A third party takes over, and the couple divides the proceeds from the sale. By turning the business into a financial asset, it makes it easier to divide.
Every situation is unique, but it is important for couples to fully understand the options that they have and the legal steps they still need to take.
