When spouses are also business partners, there are two relationships at play. If one of those relationships end, the other is likely to be impacted. Understanding the available options can make it easier for a Florida couple to create a plan for dividing their business interests during the dissolution of marriage.
In some cases, spouses can continue to run their business together, even after a divorce. This can be tricky, but there are instances in which both partners are able to set their emotional reaction to the divorce aside and focus on keeping their business up and running. Often, couples who end their marriage in an amicable fashion or choose mediation over litigation are best suited for this type of arrangement.
Another option is for one partner to “buy out” the other. This can be a good solution for couples who want to go their separate ways after the divorce and do not wish to remain entangled financially. However, in order for this approach to work, it is necessary for one partner to have the means to purchase the other’s interest in the business. If he or she does not have sufficient case to do so, it may be possible to cede interest in other assets. For example, some spouses will give their husband or wife their own share of equity in the family home, as well as a portion of retirement savings, in order to “buy out” the departing spouse’s interest in the business.
Very often, neither of these approaches are feasible. In such cases, the business may need to be sold and the proceeds divided between both Florida spouses. This is often not the most desirable outcome of the dissolution of marriage, but it does allow both parties to move forward to new ventures, often with a degree of financial stability gained from the sale of their business.
Source: Forbes, “How To Handle Divorce In A Family Business“, Lora Murphy, March 7, 2016