One of the most difficult aspects of divorce is dividing marital assets. Florida requires divorcing couples to divide all marital assets equitably. For couples that own a closely held business, this mandate becomes even more complex.
While it may be surprising to a spouse that owns a business that they run themselves and without any input from their spouse, almost every business is a marital asset requiring division. Once the shock is over, there are three common ways most divorcing couples use to divide a family business.
A buyout, where the managing spouse pays for their “share”, is the most common solution. If the buying spouse has enough cash they can purchase the business outright; otherwise, they can give up interest in other marital assets to create an equitable distribution. A buyout is a desirable solution because it allows the business to continue without interference, and allows the divorce to effectuate a clean break between the two spouses.
Both spouses can jointly own and operate the business after their divorce. For couples with an amicable divorce this may work; however, most divorcing couples find the idea of remaining business partners unappealing.
If neither spouse wishes to keep the business, or if there are not enough funds or assets to accommodate an equitable distribution, you can sell the business and split the proceeds. This option can be time-consuming and may considerably extend the settlement process.
There are advantages and disadvantages to each resolution. Choosing the right one for your situation can make the divorce process much smoother.