Divorce is a complicated process in the best of times. It can be emotionally difficult, especially if there are children involved. The parents have to decide about child custody and visitation, which can be very tough. Divorce can also be difficult financially. When a couple divorces, they have to divide their assets and debts, but they may not be able to agree on how to divide them. The couple may have to pay for two separate households afterward, which can be expensive, especially if one of the spouses is not working.
Divorcing when you own a business together can be even more complicated. A reliable business attorney can help with this by providing legal counsel and advice on dividing the business fairly and equitably. They should also know what to expect from both spouses regarding their involvement with the company post-divorce. Here are some things you should expect in the division of your business.
1. Business Assets
The business assets will be divided between the spouses in the divorce. That includes any physical property, such as buildings or equipment, and intangible property, such as patents or copyrights. The couple will have to agree on who gets what and how much each spouse will get. They may need to hire an appraiser to value the business assets.
2. Business Debt
The business debt will also be divided between the spouses in the divorce. That includes any loans or lines of credit that are in the business’s name. The couple will have to agree on who is responsible for paying off the debt and how much each spouse will pay.
3. Business Income
The business income will be divided between the spouses in the divorce based on their ownership stake in the company. If one spouse owns the majority of the business, they will likely receive a larger share of the income. The couple will need to agree on dividing the payment and may need to hire an accountant to help with this.
4. Business Expenses
The business expenses will be divided between the spouses in the divorce based on their ownership stake in the company. The couple will need to agree on who is responsible for paying the expenses and how much each spouse will pay.
5. Business Valuation
The business will need to be valued to determine how to divide it between the spouses in the divorce. The couple will need to hire a business appraiser to value the business. They will also need to agree on who will pay for the appraisal.
6. Buy-out Option
One spouse may have the option to buy out the other spouse’s share of the business in the divorce. That can be a good option if the couple can’t agree on dividing the business. The couple will need to decide on a price for the company, and one spouse will need to have the financial resources to buy out the other spouse.
7. Continued Ownership
The couple may decide to continue owning the business together after the divorce. That can be a good option if they can work together and if they don’t want to sell the business. The couple will need to agree on dividing the company and how to run the business.
8. Selling the Business
The couple may decide to sell the business in the divorce. That can be a good option if they can’t agree to divide the company or don’t want to continue owning the business together. The couple will need to decide on a price for the business and find a buyer for the business.
9. Getting a Fair Share
It is crucial to get a fair share of the business in the divorce. That can be difficult to do if you are not familiar with the company or if you are not working with a business lawyer. You may need to hire an appraiser to value the business, and you will need to agree on a price for the company. If you cannot agree on a price, you may need to sell the business.
10. Retirement Accounts
If the business has a retirement plan, such as a 401(k) plan or pension, the couple will need to decide how to divide the assets in the divorce. The couple will need to agree on who will receive the assets and how much each spouse will receive. They may need to hire an accountant to help with this.
11. Health Insurance
If the business provides health insurance for the employees, the couple will need to decide how to handle the health insurance in the divorce. The couple will need to agree on who will continue to be covered by the health insurance. Also, they must decide how much each spouse will pay for the premium.
12. Life Insurance
If the business owns a life insurance policy for one of the spouses, the couple will need to agree on who will receive the life insurance policy and how much each spouse will receive. They may need to hire an accountant to help with this.
Divorce is never easy, but it can be even more difficult when you own a business. The legal and financial implications of divorce on businesses are complex. A knowledgeable attorney will be able to help make the process smoother by guiding couples through these tough decisions. That will give you peace of mind that your interests are protected.
