You know your divorce is coming and have started to prepare. As you think about the family home, cars and potential custody payments, do not forget about the impact divorce will have on your family business. If you are not prepared, your divorce could have a devastating effect on the business.
There are things you can do to protect yourself and the business. Get trusted help with dividing your business during divorce.
1. Plan ahead
One of the most frustrating parts of the process is valuing the business and figuring out how much each spouse will get. If you do not have a prenuptial agreement, buy-sell agreement or shareholder agreement, this can turn into a long legal battle over business valuation.
2. Get a business valuation
At some point, you will have to get an expert to value your business. Try your best to only have one business valuation firm–if you each hire one, it can get ridiculously expensive and nasty. The price tag for a single valuation can be steep on its own, so try to agree with your spouse on a valuation company to reduce expenses.
3. Beware the two-headed beast
If you and your spouse are unable to agree on the value of the business, try to avoid splitting the company in half. Two equal partners battling one another will not likely last long. Try to give one partner ultimate control by rewarding the other with assets. The other option is to continue running the business together. If you want to pursue this, it makes sense to get a shareholder agreement giving you the option to get out.