Splitting up a Family Business During Divorce
When a family business is part of the marital estate, the already complex asset-division process becomes even more complicated. This is especially true when the spouses launched the business together. Continuing to jointly operate a business isn’t feasible for most ex-spouses, so it’s generally necessary to divide the business or its value in a fair manner.
There are several options for dividing business assets during divorce:
- The most straightforward option is to simply liquidate the business and divide the proceeds between the spouses. This approach may not be prudent, however, if the business is thriving. It also may have adverse tax consequences.
- An alternative that keeps the business intact is to allocate the entire business to one spouse and compensate the other spouse with a greater share of other marital assets. In effect, one spouse buys the other out. This, however, raises complex business valuation issues. It also can be impractical if the business represents the bulk of the marital assets.
- Another option is to transfer management of the business to a third party but reserve income interests for each spouse. This is not an option, however, when the spouses want to remain actively involved in the management of the company.
Resolving business issues during a divorce can be a challenge. As experienced Nassau County divorce attorneys, Bryan L. Salamone and his associates have the knowledge that people facing divorce in New York need to protect their interests and move on with their lives.