Holding Onto The Family Business After Divorce
Couples who create and/or build a family business during the course of a marriage stand to lose much more than most spouses if divorce becomes a possibility. Family businesses are the backbone of this country, and most are sustained by brand and face loyalty that can easily be disrupted or destroyed if the complications of divorce overwhelm daily operations and oversight. Further, breaking up the family business or acquiescing to the exit of a spouse may not make sense financially or for the health of the business. Thus, in many situations, former spouses must figure out how to make working together once the marriage ends a viable option. This transition will not be easy or fast, but if the right approach and care is taken, this arrangement is possible when more traditional options for negotiating the separating of interests of the family business are not realistic and/or desired. A discussion of tactics divorcing couples can take to preserve the ability to run a family business together, as well as more standard options for severing professional ties if continued associations are not possible, will follow below.
Running the Business Together
No one who has invested the sweat equity required to make a family business work wants to walk away from an operation that is successful, but continuing to work with an ex-spouse does present challenges that need to be addressed. The major piece that must be in place for continued mutual operation of a family business after divorce is respect and open communication. Without these ingredients, former spouses can easily allow negative emotions related to the ending of the relationship interfere with their ability to do their jobs. Additionally, because these former couples will not receive the space from regular interaction most individuals use to heal from the divorce, seeking professional counseling is important to learning effective and civil methods of communication. Importantly, an agreement regarding what happens if a former spouse decides to leave is essential to normalizing relations and reducing the likelihood of dispute if a party later decides to exit. Finally, employees need to be informed about what is happening, so they will feel their jobs are secure, which, if absent, can affect their productivity and commitment to their work.
Buying Out the Other Spouse
On the other hand, many couples facing divorce do not have the desire or capacity to continue seeing the other spouse on a regular basis, and must explore other ways of addressing the interest each holds in the enterprise. If one spouse is willing to walk away, and the other party wants to continue, an offer to buy out the interest is a possibility. Just like any other marital asset, the value of the business would be divided equally, which is determined through a professional valuation, and the party remaining in control can offer a cash buyout or other assets in exchange for the business. Note that this issue can easily become contentious if neither side is easily persuaded to walk away, and the services of an experienced divorce attorney to negotiate an acceptable resolution can provide a huge benefit.
Selling the Business
Finally, if neither spouse wishes to continue operating the business, or it is not possible to keep it running with just one party, the company can be sold and the proceeds divided. An appraisal should be performed before the business is listed to determine the fair market value, and the parties will need to negotiate beforehand how they want to handle the sale, so any transaction can move efficiently once an offer is made.
Contact a Florida Divorce Attorney
Unwinding or separating a family business in divorce is a complicated and sensitive issue that needs the attention of a divorce attorney with extensive experience in financial matters. The attorneys at the office of Joyce A. Julian, P.A. have years of experience negotiating and litigating complex financial matters, and can get you the results you deserve. Contact the Fort Lauderdale law firm for a free consultation.