As the last months of the year come closer, many people become reflective. It’s not uncommon for people who are unhappily married to think about starting the new year with a fresh perspective on life — and a divorce.
Things get complicated, however, when there’s a family business involved.
What becomes of the family business when you divorce?
Oklahoma is an equitable distribution state, meaning that couples either have to settle lingering property division matters among themselves or a judge will decide what’s the fairest way to handle that on their behalf.
It’s likely that your company is considered a marital asset subject to division unless you have a prenuptial or postnuptial agreement that says otherwise. That means you generally have the following options:
- Continued your co-management of the company: You and your spouse might effectively work well as business partners, but not as life partners. You might decide to continue running your company jointly after more clearly defining your roles and responsibilities in a partnership agreement.
- Buying out each others’ stake in the business: You may want to consider approaching your spouse and asking if they will sell you their ownership stake in the company. You may have to turn over more property during negotiations or set up a payment plan to buy them out of the business, but this could be a viable option if you’re invested in your company’s success and they really are not.
- Selling off your business: We often must make the best choice out of two undesirable options in life. Perhaps the best way to deal with a situation in which you and your spouse can’t compromise on moving forward with the business is to sell it off and split any residual profits. You can always set up a new company in the same industry after you do that.
Having property division discussions in a divorce can be challenging, but they tend to be more contentious the more valuable an asset is. There are options for handling your family business. You’ll want to make the best choice that protects your financial future in your situation.