When spouses who are in business together divorce, there is an entirely different layer to the break-up than the end of the marriage. They have to determine what is going to happen to the company that they may have built together and is the source of both of their incomes.
There are a number of scenarios regarding what can happen to the business. Which one a particular couple chooses depends on how they feel about each other and the business and whether they are able to continue to work together as business partners.
Of course, when you set up the business, you clearly defined what would happen in the event of a divorce, that makes things easier. However, just as many people don’t want to get a prenup when they get married, many married business owners also don’t want to anticipate the possibility of a divorce.
So what are the options? There are many factors to consider. You want to be able to continue to support your children and yourselves, and your business is likely what’s doing that. Depending on your business and personal relationship, there are essentially three options:
— You sell the business and divide the proceeds.– One spouse can buy out the other one.– You may continue as business partners.
The last one can be the most emotionally challenging. However, many couples find a way to make it work.
They do so by redefining their relationship as a working one. Personal issues can still creep into a business relationship. Therefore, it’s important to keep these issues out of the workplace for the sake of the company’s success and your relationships with other employees.
If one spouse has betrayed the other’s trust, perhaps by cheating, they may need to put new financial safeguards in place. They may also need to more clearly define their roles in the company.
The decision is one that each couple needs to make individually. Whatever the decision, it’s essential that you have a North Carolina family law attorney with experience in dealing with divorcing couples who share a business so that you can protect the fruits of the hard work that you’ve put in, regardless of what you decide to do going forward.
Source: Wall Street Journal, “How to Keep a Business Alive After a Divorce,” Andrew Blackman, Jan. 24, 2016