While figures vary, most studies state that between 70 and 90% of all businesses in the U.S. are family-owned. There are many advantages to this. Family members can trust one another and typically share goals and visions for the company.
Nonetheless, divorce can make dealing with a family business very tricky. What options do spouses have for the business when getting a divorce?
One spouse can be compensated
In Tennessee, marital property is subject to equitable distribution laws. This means that each spouse must be fairly compensated for joint assets. One spouse may continue to run the company, while the other is offered a lump sum or installments for their share. The sum or installments will be equitable and reflect the spouse’s contributions to the business.
The business can be sold
It may not be feasible or desirable for the business to keep on running with either spouse. Thus, a complete sale of the company is one option. Once the business is sold, proceeds will be split equitably between each spouse.
Continue as business partners
Some divorces are mutual and former spouses can remain amicable upon the conclusion of proceedings. This could mean that they are able to continue with the business partnership as before. If this happens, it’s important that personal matters are left to one side. There should be a joint focus on the best interests of the company.
Dividing assets during a divorce can be tricky. Even if you and your spouse are amicable, it’s best to seek legal guidance so that you take the appropriate steps.