Couples who have decided to part ways often face multiple challenges as they move through the process of dissolving their union. In addition to the emotional toll, each party must make potentially life-altering decisions about various aspects of their lives, including children, living arrangements, property division and finances. Massachusetts couples going through a divorce who own and operate a family business together face yet another area in which difficult decisions must be made.
A financial expert explains that divorcing individuals in this type of situation must decide their intended level of involvement in the business going forward and also how the business will be divided financially. Firstly, the a professional appraisal for the business will be needed. After that, there are several options regarding what to do with the business.
In many cases, one spouse will keep the business and buy out the other party’s interest, based on the appraised value. Divorcing couples most commonly opt for this approach, and typically, it is not a taxable event. In some cases, both parties choose to keep the business and continue working together, although this approach is less common, likely for obvious reasons. Some divorcing couples decide to sell the business and move on to other interests, perhaps retirement or starting a new business independently. However, selling a business can take time, so some people may find this option stressful as they will have to decide who will run the business in the meantime or settle on an amicable working arrangement.
Divorcing couples with a family business may differ on which option is most suitable for them; what works for one couple may not work for another. In each situation, both parties must consider their emotional and financial needs and decide what works best for them. Experienced family law attorneys are available to help Massachusetts couples who are ready to begin the divorce process with making such important decisions.