Divorce and Your Family Business
Spouses who have operated a family business throughout their marriage face a particularly difficult situation when their marital relationship deteriorates. While some separated or divorced spouses can continue working together to run the business in an amicable manner, this is not a realistic possibility for many couples. Fortunately, there are other workable alternatives, depending on each spouse’s goals for the continued operation of the business.
Divorce courts in New York have a duty to divide all marital property equitably between the parties. This includes the family business. In some cases, one spouse may want to keep the business, and the other spouse may no longer want to be involved in the business. In other cases, the spouses may agree to sell the business. Once the parties have determined a fair value for the business, the spouse who wants to operate the business can buy out the other spouse’s share. Of course, the spouse keeping the business will want to buy out the other spouse at the lowest possible cost, whereas the spouse leaving the business will want to receive the highest possible value for his or her share. Coming to a resolution that works for everybody is the goal. Alternatively, the spouses can sell the business for an agreed-upon price and divide the proceeds.
Although every situation is different, the family business may be one of the largest assets that a couple owns. Spouses first must place a fair value on the business to include it in the division of marital property. This is not always the easiest task, particularly in small family businesses where the spouses may have written off many personal expenses as business expenses. When spouses are unable to agree on a fair value for the business, they often look to a business valuation expert for assistance. These experts are sometimes expensive to employ, but working in collaborative divorce or mediation usually makes it more affordable.
Divorce often is stressful for all parties involved and can be particularly complex when a family business is involved. Contact Miller Law Group today and let us show you how we can assist you with your Westchester County divorce case. Our attorneys focus their practice on divorce and other family law-related issues, no matter the complexity of the questions involved in your case. We can answer your questions, calm your concerns, and help guide you through every step of your divorce proceedings.