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3 options for dividing the family business in a divorce

On Behalf of | Jan 26, 2023 | Divorce, Family Law

When it comes to the property division phase of your divorce, your family business may well be the most significant asset.

There are three main options to consider with respect to the disposition of your business.

1. Sell the business outright

Selling the business may be the first option that comes to mind. It would give you and your spouse the chance to make a fresh start. Once the business sells, you could split the profits and open the next chapter of your lives. However, you will first need to engage an appraiser to perform a valuation in order to determine the appropriate selling price. You should also keep in mind that if the business does not sell quickly, the two of you may have to work together longer than you anticipated.

2. Perform a buyout

If you wish to continue owning and operating the business, you could buy out your spouse. This is the option most couples prefer, partly because of the tax consequences. The transfer of property in a divorce is not taxable. But again, you would need a valuation. If the funds are not readily available, you could either work out a payment option or offer an exchange of assets equal in value to the worth of the business.

3. Continue as co-owners

If you and your spouse are facing an amicable divorce, you can consider keeping the business and continuing as co-owners. There would be no need for a valuation, and you would keep your respective interests in the business. This concept does not work for everyone, but it is the simplest, and sometimes most attractive, option of the three.


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