Should You Sell Your Family Business During Divorce?

 Posted on April 25,2019 in Business and Divorce

Business owners have three options when their business is a marital property that is subject to division in a divorce:

• One spouse can retain full ownership by buying out the other spouse’s ownership interest or giving up other marital properties;
• Both spouses can be co-owners of the business; or
• They can sell the business and split the proceeds as part of the divorce.

The third option is usually the least popular because selling a business may be giving up your livelihood. There are some situations where selling a business is a viable option, but you still must consider the complications of doing so.

Receiving Fair Value

You want to be well compensated if you choose to sell your business and lose a source of income. Before presenting your business to potential buyers, you will need to assess your business’s value, including its potential for growth. With an estimated value, you will know what a fair asking price is for your business. Unfortunately, other factors may drive down what you can receive for your business. A downturn in the economy as a whole or in your industry may decrease the number of potential buyers and how much money a buyer will want to spend. You may need to keep your business if you cannot find a buyer willing to pay fair value.

Waiting on the Sale

Selling your business can delay the completion of your divorce, leaving you in marital limbo. You will want to take your time in selling the business to ensure that you are receiving fair value for it. You may have difficulty finding a buyer if your business is not highly profitable or does not show promise for future profitability. The amount of money that you receive from the sale can affect how you divide your other properties. If your spouse has fewer non-marital assets than you, he or she may be relying on the estimated proceeds from selling the business. If the actual sale price is lower than expected, your spouse may demand compensation in the form of other marital properties.

Contact a DuPage County Divorce Attorney

A family business is one of the most complicated properties during a divorce because you may disagree with your spouse on its value and who should control it. Selling the business is the best way for you both to get equal value from it, but giving up the business is rarely the best option for you. A Naperville, Illinois, divorce attorney at Calabrese Associates, P.C., can explain your options for handling your family business. Schedule a consultation by calling 630-393-3111. 

Source:

https://www.forbes.com/sites/catherineschnaubelt/2019/03/15/how-to-divide-the-family-business-in-a-divorce/#6cb3edd542fe