They say that one should not mix business and pleasure, yet couples will often set up a business together. This can work extremely well until divorce strikes, at which point things have the potential to deteriorate very quickly. What options might California residents consider with this aspect of property division?
The first question is: can the couple maintain an amicable and trusting enough relationship to continue in business together? If the answer is yes then this can simplify matters considerably, as well as save on expenses. If this is not possible, then the next step is likely to be obtaining a valuation of the business, which may be expensive but is necessary in order to gauge the value of the asset.
This leads to the choice of whether one party should buy out the other, or whether the business should perhaps be sold completely, and the proceeds divided between the parties. It could be the case that one party feels more strongly about continuing with the business, in which case one either needs to finance the purchase, or relinquish his or her share of other assets to the value of the buy-out. If neither of these options can be made to work, then selling the business and dividing the proceeds may be the only course that remains open.
While businesses can complicate things, they need not add more stress to an already painful divorce. If California residents have a team of appropriate advisers, such as lawyers and financial advisers, and are able to keep the lines of communication open with the other spouse, the additional complexity need not cause further problems. Trying to negotiate this area of property division may be made easier if both parties take the time to think about how they would best like to move forward.
Source: Forbes, “How To Handle Divorce In A Family Business“, Lora Murphy, Mar. 7, 2016