The property division process that must be undertaken when divorce is sought can be cumbersome and hotly contested. The parties to a marriage can find themselves vying over bank accounts, retirement portfolios, pensions, personal property and even the family home. Yet, many Virginians have another asset that must be dealt with during the property division process: a business.
Figuring out what to do with a business during divorce can be a challenging feat, and there can be a lot at stake. A business can have significant value, so deciding how to divide it can have serious financial ramifications for one’s long-term financial well-being. On the other hand, some businesses struggle, meaning that some individuals would rather rid themselves of the business.
In general, there are three options when it comes to handling a business during divorce. The first is for the parties to agree to keep jointly owning the business. This can simplify the property division process, but it also isn’t realistic in many cases. To successfully pursue this option, the parties need to have an amicable relationship and a clear understanding of their role in the business.
The second option is for one spouse to buy-out the other. If, as is often the case, a spouse is without the financial means to buy out his or her ex, other marital assets can be divided in a way that essentially compensates the selling party for giving up its share of the business.
The last option is to completely sell the business and divide the proceeds. This is a common approach, but it, too, requires some work because the business and its assets need to be appraised and sale terms negotiated.
Divorce can have a tremendous emotional and financial impact on an individual. This is why it is often best to address the legal issues involved with marriage dissolution with the assistance of a qualified legal professional.