Some married couples in Stamford choose to establish a business together as co-owners. While their entrepreneurial spirit might make their business a success, some may find that their marriage isn’t as strong. When a couple co-owns a business, and decides to divorce, they will have to decide what to do with their business moving forward.
First, it is important to understand that when it comes to asset division in a divorce, Connecticut is an “equitable distribution” state. This means that marital property will be divided in a manner that is fair, even if it doesn’t result in an exact 50/50 split. If a couple forms a business together while married, then that business might be considered marital property, and if so, will be subject to division.
One option that might work for some couples who are splitting on amicable terms is to continue co-owning the business. Not every divorce is acrimonious, and some spouses may find that despite their divorce they can still cooperate enough to continue to run their business together. Some advantages to this is that each spouse keeps their interest in the business and a business valuation and buy-out is not necessary since the asset isn’t being awarded to one party or the other.
However, what may be more common is for the business to be included in the marital estate, with one party being awarded it during the property division process. If that is the case, in general the party retaining the business will have to buy out their ex’s share of the business or exchange other valuable assets for it. In this situation, a business valuation is necessary, as a business is often one of a couple’s most valuable assets.
Finally, if neither party wants to keep running the business post-divorce, they may choose to sell it and split the proceeds. A business appraisal will need to be performed, so an appropriate sale price can be agreed upon. Keep in mind that until the business sells, each party will have to continue operating the business together.
These are some general options when it comes to the family business and a high-asset divorce. What options are available to you will depend on the specific facts of your case. To better understand property division in a high-asset divorce, it can help to seek professional legal guidance.