Tackling the family business during property division

Tackling the family business during property division

| Mar 22, 2019 | Family Law, Firm News |

Owning and operating a business with a spouse can be a great way to spend time together while also establishing a family income. Divorce can complicate business matters, though, and some Louisiana couples might find themselves stuck in seemingly impossible situations. Here are a few things to keep in mind when dealing with family-owned businesses during property division.

Like with any other marital asset, the first step is to get the business properly valued. This should be done by an impartial third party. Having an outside party establish the value might seem over the top, but it is necessary to ensure that neither spouse tries to under or overvalue the business.

After figuring out how much the business is worth, couples have to tackle the difficult part — deciding what to do with it. One of the most common options is for one person to keep the business. This usually involves that person buying out their ex’s interest in the business based on the established value. If done correctly as part of transferred property incident to divorce, the remaining owner should not have to pay any related taxes.

Less frequently, some divorcing couples choose to continue running the business together. This requires a high level of cooperation and willingness to work together, which can be difficult for freshly divorced couples. In other cases, couples decide to simply sell off the business entirely and split the resulting profits.

Business owners in Louisiana tend to have significant emotional ties to their companies. This can make things like property division especially difficult. However, difficult does not mean impossible. Divorcing couples who co-own businesses can usually reach agreeable solutions by paying close attention to important details and seeking experienced guidance when necessary.