Numerous couples across the country, including in Massachusetts, own businesses together. A family-owned business can be a great thing, but what happens when a couple chooses to go separate ways by seeking a divorce? How is the company treated during the property division phase of a divorce?
A family-owned business is a big asset. It is understandable that either party would be hesitant to walk away not only for financial reasons but also for emotional reasons. After all, lot of time and effort goes into building a successful family business.
What happens to a shared business is not likely to be decided by a family court judge. Spouses will have to decide what they want to do, whether that be selling or keeping the company. If both spouses agree to sell to a third party, the profit could then be divided as part of the divorce settlement. Of course, it is also possible for exes to continue to work together or for one to choose to sell his or her half of the company. Whichever path is chosen, it is a very personal decision, one that can only be made after looking at all of the positives and negatives of each choice.
Legal counsel and other professionals can help divorcing business partners in Massachusetts determine the best courses of action to take for their circumstances. In some cases, selling a business and including any proceeds in property division settlements may be the best thing. For others, though, working out other arrangements that keep a family business in the family may be possible.
Source: Forbes, "How To Handle Divorce In A Family Business", Larry Light, March 7, 2016