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Business ownership and divorce

On Behalf of | Jul 5, 2018 | Family Law |

For many people in Nebraska who own and operate a business with their spouse, the ability to work together for the common family good with a trusted partner can be extremely rewarding. However, when the personal relationship between the owners goes south, the health and future of the business may be in jeopardy if the owners do not proactively make a plan on what to do with the business if they get divorced.

As explained by Forbes, there are generally three options for divorcing business partners. Perhaps the one many may think of as the most common is for one spouse to keep the business and the other spouse moves on. In this case, the spouse who leaves the business might either receive a sum of cash from the remaining owner or other marital assets in exchange for letting their former spouse keep the company.

If neither spouse wants to stay in the business or one person cannot afford in some fashion to buy the other person out, the couple may decide to sell the business to a third party. In both of these situations, the company will need to be appraised and the spouses will need to agree on a value. Some people find that they are able to continue being business partners even though their personal relationship has disintigrated.

MarketWatch suggests that business owning spouses may want to have either a prenuptial agreement or a buyout agreement, also called a buy-sell agreement, made during the good times so that their plans for the business are already identified when times get tough.

 

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