Pennsylvania’s divorce laws generally require dividing your marital assets. You and your soon-to-be ex-spouse may, however, negotiate a fair division. The process includes splitting a business that either spouse started after your marriage.
Forbes reports that a third-party appraisal reveals an objective business value. Having an unbiased evaluation may provide you with options to divide the business in a way that meets each spouse’s financial needs.
Who may keep the business after the divorce?
If you operate a business with your spouse, you may consider whether to continue the relationship. Service-oriented businesses that rely on a spouse’s skills, for example, may require couples to remain partners after a divorce.
Some ex-spouses have the ability to run a business together, but with new schedules and different shifts. When a business requires only one spouse, however, a divorce may result in buying out the departing spouse’s ownership. Spouses may discuss a fair settlement or plan to make payments over time from the business proceeds.
What might occur if both ex-spouses remain owners?
Divorce may require a carefully crafted plan for splitting a business. As noted by Business.com, a change in structure could dilute your ownership interest. Giving your ex-spouse a larger percentage of ownership, for example, may increase his or her ability to vote or make management decisions.
A business that requires its owner’s full attention may face problems when stress or friction exists between divorced partners. In some cases, couples choose to sell the business and divide its proceeds rather than continue owning it.
Before discussing a fair division, consider the impact a business ownership change may have on your customers or employees. Divorce may include one spouse giving up a share of other marital assets to take full ownership of a family business.
