Who Keeps the Family Business After a Divorce?
For many couples, the most valuable asset they own is the marital home, and it becomes the subject of the most heated dispute over division of property in the couple’s divorce. In this case, the court usually awards the marital home to the party that needs it more; if they both need it, or if neither one does, then the court often orders the parties to sell the house and share the proceeds. Disputes over a couple’s small business can be just as fraught with conflict, because not only has the couple invested their efforts and money in the business during the marriage, but it is also potentially their main source of income after the divorce. As with virtually every other aspect of divorce, every family is unique; how the court assigns ownership of your family business depends on many factors, such as how much each spouse has contributed to it before and during the marriage and each party’s prospects for earning a livelihood outside the family business. If you and your spouse are also business partners, but now you are getting a divorce, contact a Tennessee divorce lawyer.
When It Makes Sense to Award the Business to Just One Spouse
Many times, a married couple operate a business together, but only one of them has a skill set that is truly irreplaceable with regard to the continued existence of the business. For example, if the family is in the business of deck building, but Dad builds the decks while Mom does the bookkeeping, it makes sense for Dad to keep the business, even if they each devoted an equal number of hours to the business during the marriage. Mom would not be able to build decks without Dad, but she could earn a living with her bookkeeping skills if hired by another company, whether it was in the business of building decks or any other industry. In one Tennessee case, the court awarded the couple’s telephone installation company to the wife; she appealed the decision, because she had never installed a telephone in her life, so the business quickly lost its value after the divorce.
Buying Your Spouse Out of His or Her Share
When there is no clear answer as to which spouse is the heart and soul of the business, the court might award each spouse fifty percent ownership of the business, or partial ownership with the percentages divided some other way. Many people would consider it a nightmare to continue being business partners with their ex-spouse, so the parties sometimes agree that one spouse will buy out the other spouse’s share when the divorce becomes final. Sometimes the court even orders the parties to do this. This is often the best solution when there are other partners in the business, in addition to the two spouses.
Contact Us Today for Help
A divorce lawyer can help you dissolve a marriage that was also a business partnership. Contact Knoxville divorce lawyer Patrick L. Looper for a consultation.