Getting a divorce can be a costly process. While the average divorce can cost a spouse more than $10,000, it can be even more expensive for business owners. As a business owner, you should know that divorce can also impact your company in several different ways. Here are the most common outcomes for a business in a divorce:
The portion of ownership that each spouse has in a business is a power negotiation tool in asset division. Sometimes, a spouse may attempt to buy the other spouse’s portion of a company. This purchase can be made in cash or in other assets in the divorce, such as the primary home or vacation home.
If negotiations for a buyout do not work, or neither spouse wants to give up their share of the business, they can continue being co-owners. While ownership may not change, the dynamic of the ownership might. Instead of both spouses running the business, one spouse may take a silent partner role and collect their share of the income while letting the other spouse manage the business.
Sometimes, neither spouse wants to continue owning the business, and they agree to sell the company entirely. From there, the profits from the sale can also become a point of negotiation similar to a buyout, where one spouse may opt for less cash from the sale in exchange for ownership of the family home or cabin.
Build a strategy to suit your needs
Going into negotiations about your business division blind can leave you in a vulnerable position. Instead of just hoping for the best, work with your attorney to determine what your goals are in asset division and what you can do to secure the outcome you are looking for in your divorce as a business owner.