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4 things to consider when divorce affects a family business

Running a business is stressful. Getting a divorce is just as stressful. When your business is in the middle of a divorce, the situation can turn dire. You should make sure that you prepare for what is going to happen if you are dealing with a business involved in a divorce.

While the exact points you have to consider vary depending on the circumstances, there are some universal considerations to think about. Make sure you take the time to ponder each point carefully since it can affect you and the business you have worked so hard to grow.

#1: Valuation matters

You need to ensure that you have an accurate valuation of your business going into the divorce. This helps you and your ex to determine what you are going to do with the business. This is especially important if there is going to be a sale or a buyout of the business. The valuation should take every aspect of the business into account, including the profits and the potential.

#2: Decide on the fate

You must decide the fate of the business. You have a few options:

  • Sell the business
  • Have one person buy out the other
  • Run the business together
  • Close the business

Each of these options has specific considerations in and of itself. Think carefully about how each of the options will impact your life and the life of everyone involved so that you can decide what you are going to do.

#3: Focus on the outcome

One you know what is going to happen, think about the outcome of the situation. This can make going through the challenges you will face a bit easier. You and your ex might not agree on all the points that you must decide. Instead of focusing on the he-said-she-said and the strife, concentrate on starting your new life, no matter what the fate of the business is.

#4: Planning is the key

You must make plans about your life and the business. If the business is closing, make plans to live without the income. If your ex is buying out your business, make plans for what you want to do after the buyout is complete.

If you are buying out your ex, think about how you will run the business. If you and your ex will run the business together, set clear expectations for what is going to happen. Write out what your role for the business is and what your ex's role is. The more you plan now, the less you must make guesses in the future.

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