Dividing a business during the divorce process often wreaks havoc on the family business. It can be either a crippling experience or one that brings the couple together when it comes to reaching their divorce goals.
The Collaborative Divorce Process Helps You Identify Your Goals
In traditional divorce litigation, spouses often fight over the value of the business, each wanting to remain an owner or active member of business management. This conflict often wears down the performance of the business until it has no value.
In a Collaborative Divorce, the professional team helps the parties establish goals for the business and to learn how to work together so the business can continue to thrive.
One or both spouses may have emotional ties to the family business. Some to consider when deciding what to do next are:
- Is the end goal to pass the family business to their children?
- Are the children interested in getting involved in the business?
- Do both spouses want to continue in the business, or does one spouse want to buy the other one out and continue the business alone?
- Do they want to sell the business, divide the proceeds, and go their separate ways?
No matter what the goals are, there must be a value placed on the business.
How to Value the Business
Just like the marital home must be valued in order to divide it between the parties, a value must be placed on the business. This is done by finding someone with the appropriate credentials to do a business valuation.
If both parties continue owning the business together, it is still important to put a value on the business, so the spouses know what it was worth at the time of the divorce.
The team of professionals can help the couple understand the consequences of deciding to keep the business and own it jointly, of selling the business and dividing the proceeds, or of one spouse buying out the other spouse’s interest in the business.
One of the best environments for this decision-making process to occur is in a collaborative divorce setting. For more information about dividing the family business during the divorce process and using the Collaborative Divorce process, contact us at Heberger & Company, An Accountancy Corporation.