Ruggiero Law Blog

Tuesday, July 14, 2015

What Happens to your Business in a Divorce?

Given that this situation encompasses various areas of law, you should consult both a matrimonial and a business law attorney. Depending upon the type of business the division between you and your soon-to-be ex-spouse may be straightforward. However, more than likely, it may take significant work to be able to divide the business. If you and your wife intend to continue to own and/or operate the business together, you could simply divide the ownership between the two of you.

Otherwise, the two of you have to continue to work together until the business is actually sold or dissolved. If the business is such that it has two distinct areas you could spin off one of those into a separate entity that can be owned by one of you.  If the business owns real estate, perhaps some of the real estate could be transferred into a new entity to be owned by one of you with the other of you retaining the ownership of the original entity. If the business is such that it is almost impossible to divide, then perhaps one of you becomes the sole owner of the business and has to pay the other over some period of time for the value of one half of that business. Instead of paying the other of you perhaps an outside loan from a bank or other lending institution could be obtained to provide the funding for the purchase price.

A final option may be that the business has to be sold to an outside third party and the proceeds would be divided between you and your spouse in accordance with any agreement between the two of you that have been approved by the divorce court or pursuant to an order.

Consult with legal tax and financial professionals for proper guidance.

Additionally register for our tax and business succession planning sessions here.


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