The fate of your family business may hang in the balance when you decide to go separate ways with your spouse, who also doubles up as a business partner. Since you both have a financial interest in the business, what does the future hold after divorce?
There are several ways of handling such a situation. You can either continue normal business operations as partners like before, sell the business and divide the proceeds or buy out your partner and retain the business. It all depends on whether you and your spouse can agree on how to resolve the matter.
Working together toward a viable solution
Several issues may come up when determining the future of the family business, such as ascertaining each spouse’s interests or the value of the entire business. You may also not be in a position to buy out your spouse while selling the business would be shortchanging yourselves, especially if it was thriving.
In such a case, the only practical way out is by reaching an amicable deal with your soon-to-be ex on how everything should be handled, something a collaborative divorce can help you achieve. You can agree on the best way out as business partners after an informed review of the prevailing circumstances of the business.
Keep the business going
A collaborative divorce will ensure the business runs smoothly as you both try to find a middle ground. It may not be possible to do this in a contested divorce where personal interests come first. For instance, a family court judge may order the business accounts frozen pending the conclusion of the divorce, which can adversely affect operations.
Still, it helps to seek appropriate assistance even if you and your spouse opt for a non-contested divorce. The proper guidance and representation in a collaborative divorce will help protect your financial interests and potentially save the family business.
