A previous post on this blog talked about how Massachusetts couples who own a family business together and who are going through divorce have to make some important decisions. Sometimes, couples who have never been married may face similar issues.
One of the biggest decisions is whether they will continue to operate the business together. Assuming that the couple is not going operate the business together, then they will have to explore several other options.
In many if not most cases, family business assets will be subject to marital property division, meaning each spouse will get a fair share of the business or its equivalent. The existence of a prenuptial agreement and the way the business is structured may play a role in how a business gets divided.
When it comes to actually dividing a business, perhaps the most basic way to do so is to sell the business on the open market and divvy up the proceeds. While this is relatively straightforward, it can also mean a lot of emotional heartache for a person who sank a lot of time and love in to the business.
Moreover, selling may in the long run be a bad financial move that hurts both sides.
There are other ways a person who wishes to remain in business can buy out his or her spouse. Sometimes, a spouse is willing to become a creditor of the business, or, more properly speaking, the other spouse, by accepting a promissory note or some other payment plan.
In other cases, one spouse may give concessions to the other spouse with respect to other property or even alimony in order to preserve his or her business interests.
Creative solutions are often available in these sorts of situations and can be explored through mediation or other legal techniques.