Conventional wisdom may advise against mixing love and money, but the reality is that some married couples might become business partners. In fact, Census Bureau data indicates that 3.7 million small businesses are co-owned by married couples. So what happens to a business if a couple decides to divorce?
According to a recent article, many couples may opt for selling their ownership interests in a business after a divorce. However, a divorce doesn't necessarily require the forced sale of a small business. In fact, the article profiled several ex-spouses who were able to separate their personal and professional relationships and remain in business together.
However, an attorney that specializes in business division and divorce knows that ex-spouses may also rethink their decision to remain business associates. For example, when an ex-spouse starts a new relationship, that new romantic partner may resent all the time that is being spent with a former spouse.
Fortunately, an attorney may have strategies to anticipate a variety of contingencies. For example, it may be advisable for each spouse to obtain an independent valuation of the business during a divorce. Each spouse's ownership share can be reduced to writing and included as part of the equitable distribution of marital property.
Of course, that process alone can be complicated. A spouse may dispute the other's valuation of the physical assets and goodwill of a business. There may also be complicated issues, such as tax credits or liabilities, hidden assets, and the effect that a spouse's ownership interest may have on child and spousal support calculations. A divorce attorney can provide much needed assistance in these areas.
Source: National Public Radio, "When Divorce Leads To A Happily Ever After For A Small Business," Yuki Noguchi, April 17, 2014