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Dividing the family business during a divorce

On Behalf of | Dec 28, 2018 | Divorce

Pennsylvania business owners considering divorce may find themselves wondering how they can protect their investment in the enterprise and emerge from the end of the marriage with a fair deal. One of the most important pieces of information that can allow a business to be handled properly in a divorce is an accurate valuation, including the assets, liabilities, contracts and future growth of the company. Understanding the numbers can help ensure that the negotiations proceed on clear and straightforward grounds.

In addition, how the ownership of the business is structured can make a significant difference. If there are other business partners in addition to the divorcing couple involved in the business, the other partners could participate in buying out one spouse in order to protect the company during the divorce. In some cases, business partners or angel investors may insist on a prenuptial agreement to protect the company from being involved in property division issues. When one or both spouses are the only owners, however, others are unlikely to be involved. In some cases, the vast majority of the business’ wealth may remain with the spouse who owns the business. In other cases, the split may edge closer to equal shares.

Of course, when both spouses are full partners in the company, both have an equal right to its proceeds. In these cases, the couple may choose to remain business partners even after the end of the marriage. In other cases, one partner may buy out the other through trading other assets during the divorce negotiations.

Divorcing business owners may be concerned about the long-term financial effects of their decisions. Pittsburgh, Pennsylvania, divorce lawyers may advise divorcing spouses on property division issues and work to negotiate a fair settlement, including reaching an agreement on the future of the business.