Dividing a business during a high-asset divorce may be a complex concern divorcing couples who share a business should understand. Approaching a high-asset divorce may create additional challenges divorcing couples should be prepared for, including how they will divide their business.
One option for dividing a business is for the divorcing couple to sell the business and share the proceeds from the sale. This can create a delay during the divorce process, though, while the divorce waits on the sale of the business. Another option is for one of the spouses to buy the other spouse’s interest in the company out. This can be done with cash, but if the spouse seeking to purchase the business lacks the liquidity to do so, it can also be done through a settlement note that will be paid over time. The value of the business for the buy-out by the acquiring spouse will be based on an appraisal.
Another option, though less popular, may be for the divorcing couple to continue sharing the business and operate it together following the divorce. The divorcing couple needs to be able to work together following the divorce if this is the option they choose and will also require them to determine the roles each spouse will play in the business moving forward if both spouses decide to keep the business after their divorce.
Understanding the different options for how a shared family business can be divided during divorce can help the divorcing spouses better protect their interests. It allows them to select the best option for them to divide their business as they navigate their high-asset divorce process.