If you are facing a divorce, you have several important and seemingly overwhelming decisions to make, including child custody matters, child support calculations, spousal support, and the equitable division of property. However, if you have a family business and are considering a divorce, there are often unexpected financial complexities that accompany the division of such a marital asset. Understanding how a family business can be divided in the divorce process can help ensure your legal rights remain protected. The following are some ways that a family business can be equitably divided within the divorce process.
Co-Own the Family Business
If the business is a small business or a business that was run by the family for generations, you may make the decision for either financial or personal reasons that you want to continue to own and run the family business with your soon to be ex-spouse. Whether or not you make the decision to do this, you will still have to have a valuation of the business. In some cases, there may be little, if any, value in the actual business as a whole. See, Zekser v. Zekser, 293 Ga. 366, 744 S.E.2nd 698 (2013). However, in some cases, the family business will have a great deal of value, and the spouses will have started the business together. Either way, the business will need to receive a proper valuation. See, Sullivan v. Sullivan, supra.
In many cases, two spouses do not believe that they have the ability to co-own a business together after a divorce. If this is the case, you may have the ability to have one spouse buy the other spouse out. Again, this is done through a proper independent valuation of the business. After all the assets in the entire divorce are calculated along with the business, a determination is made regarding how to equitably divide all assets at once, which will include the family business. If one spouse does not have the financial means to make a lump-sum payment to the other spouse for the family business, creative financial arrangements can be made that will allow one spouse to pay the other spouse in installments, if both agree.
Sell the Family Business
In some cases, both parties will make the decision to simply sell the family business and split any of the revenue or profits from that sale equitably as part of the divorce. In these cases, an independent valuation will still need to be done to ensure and protect the financial rights of both parties.
Contact an Experienced Family Attorney Today
If you are struggling with the equitable division of property including how to divide a family business in your divorce, consider visiting with the experienced family law attorneys at Lankford & Moore Law to help you determine how best to proceed with your division of marital assets and ensure your legal and financial rights are protected.