4 options for settling the business in your divorce

When a married couple with a jointly owned business decides to part ways, choosing how to settle that business in the divorce is difficult. There are a few avenues to consider as you navigate your settlement depending on your situation.

The more you understand about the options, the easier it is to find the right solution.

1. Maintaining ownership

In some amicable divorces, both spouses choose to retain their interest in the business and continue working together after the settlement. This is the simplest solution in which you both retain your existing interest in the business going forward.

2. Selling the business

Selling the business and dividing the proceeds is a common approach if neither of you wishes to continue running it. This provides a clean break and both of you can move forward with independent projects. You need a valuation for this so that you ensure that the business sells for a fair amount.

3. Buying out a share

One spouse can buy out the other’s interest in the business and take over full ownership of the business as well. If one of you would rather keep the business while the other would like to pursue other opportunities, consider seeking a valuation and negotiating a buyout.

4. Dividing business responsibilities

If you both wish to retain your involvement in the business but would prefer not to work together, consider dividing up the business into separate divisions and segments. This makes it easier for you to maintain an active role without direct interaction.

With nearly 30% of Americans reporting that they are self-employed or entrepreneurs, everyone should understand how to settle a small business in a divorce. As you evaluate your choices, consider the nature of your relationship and your ability to work together or your desire for separation.