Any time a couple decides to divorce, going through that process can be very challenging. That is especially true if the spouses shared not only a marriage but also ownership of a business. There are various options for business co-owners who are also a divorcing couple. Depending on the nature of the divorce and the specifics of the spouses’ ownership interests in the business, some options may make more sense than others. For advice about which strategy would be the best for you, consult an experienced Florida divorce attorney.
If you both own your business as co-owners, you have several ways that you can handle that business in the wake of the end of your marriage. One is for both of you to remain working in the business. This can be uncomfortable, awkward, and not good for business. Bloomberg recently reported on one resort and casino entity in Nevada in which such a complicated dynamic existed. The ex-husband divorced the ex-wife, who was also a co-founder, and later remarried a much younger woman. That new dynamic was a recipe for difficulty as, in “what would be a difficult position for anyone,” the new turn of events meant that the ex-wife, the ex-husband, and the husband’s new wife were all attending company meetings together, according to the report. In addition to business management complications, choosing to stay as co-owners even after a divorce can possibly also have negative tax consequences.
As opposed to this strategy, a divorcing couple may want to consider other options. One of those other options is for one spouse to leave the business and for the spouse who remains to buy out his or her interest in the entity. If one spouse has historically had a much more active role in the day-to-day operation of the business, this option could make sense. To do this properly, you may need to retain a business appraiser to determine the value of the entity. If you both can agree on one appraiser, that saves the cost of hiring two appraisers, which could be a significant savings. Once the proper dollar values have been assigned, you can buy out your spouse (or vice versa). Alternatively, you and your spouse could do an asset exchange in order for you to acquire your spouse’s ownership stake in the business.
Finally, you both could agree to sell the business and split the proceeds of the sale. Financially, this option has the potential to represent the cleanest break. You’ll still likely need an appraiser if you utilize this option, in order to get an idea about a proper asking price for the business. This option may have possible hurdles, though, especially if the value of the business’s goodwill is tied to your (or your spouse’s) direct involvement in the entity.
If you are a business owner going through a divorce, especially if you share your business with your spouse, you need the knowledge and skill of an experienced Florida divorce attorney. Miami divorce attorney Sara Saba has been providing reliable counsel and advocacy for her family law clients for more than 13 years. Contact us online or by calling (305) 450-8009 to schedule your consultation and learn how we can help you accomplish your goals. Hablamos Español.
More blog posts:
Proving that an Appreciation of a Non-Marital Business Asset is a Marital Asset in Florida, Miami Divorce Lawyer Blog, Feb. 27, 2018
Dealing with Equitable Distribution in Florida as a Business Owner Going Through a Divorce, Miami Divorce Lawyer Blog, Feb. 16, 2018