Business owners have a lot to lose during divorce. The property division portion of the divorce can have a huge impact on the business. The risks to the business can be mitigated with these tips:
- Valuation. It is important to get an accurate estimate of the worth of business to better ensure a fair split. If possible, it can be advantageous for both sides to agree on one business valuation firm to complete the estimate of the business’ worth. This process is often pricey, and one valuation that both parties are comfortable trusting can cut down on costs.
- Avoid a split. Of the business that is. The experts with Crain’s Business advise against splitting the business interests between both divorcing spouses. These experts point to the fact that a “business with two equal partners who are at war with each other is not likely to last long.” If possible, it may be best for one partner to buy out the other. If not, it can help to have clear buy-out guidelines in case the arrangement does not work out.
- Plan for the long-term. The impact a divorce reaches long past the final signature on the divorce settlement agreement. Attention once solely devoted to business now needs to be divided between business matters and personal issues as each spouse is now setting up his or her own household.
The piece in Crain’s also encourages business owners to seek legal counsel to further ensure their business interests are protected during the divorce process.