Are you getting divorced and worried about the family business? This is a valid concern that plagues many divorcing couples as divorce is a common killer of family-owned businesses in the United States. However, the good news is that there are several steps you can take, both before and during divorce, that can help keep your family business intact.
Steps to Take Before Your Marriage is in Trouble
Far and away the best thing that you can do for the longevity of your family-owned business is to put an agreement in place that dictates what will happen to the company in the event that you and your spouse split up before your marriage is in trouble. Needless to say, it is usually much easier to reach such an agreement with your spouse while the two of you are still on good terms so, if possible, consider utilizing one or more of the following tools before your marriage is in trouble to help ensure that your business can survive a divorce:
- Prenuptial or Postnuptial Agreement: A prenuptial agreement (i.e. an agreement made in contemplation of marriage) that specifies what will happen to the couple’s family business if they ultimately decide to dissolve their marriage can do wonders for keeping a family business intact. Additionally, a postnuptial agreement (i.e. an agreement made during the couple’s marriage) can serve the same function. However, it should be noted that if a prenuptial or postnuptial agreement was executed long before a couple’s ultimate divorce then the terms relating to the family business may no longer be fair and one spouse may argue that it should not be upheld in court.
- Spousal Waiver: If one spouse runs the family business and the other has no interest in keeping the business in the event of a divorce then that spouse may be willing to sign a waiver stating that he/she waives any ownership in said company.
Steps to Take if Your Marriage is Already in Trouble
If your marriage is in trouble and divorce is in your future there are still some tools at your disposal that may enable you to keep the family business intact. For example, one of the following agreements may be able to help you:
- Buy Out: If you and your spouse are able to agree on the value of the family business and one spouse is willing to buy the other out then the purchasing spouse will be left as the sole owner and the business will remain intact.
- Co-Ownership/ Agree to Work Together: Some spouses are able to end their marriage on good terms and continue to manage their family business together. This plan is somewhat risky as even exes that are on good terms tend to hit bumps in the road from time to time, however some divorcing spouses are able to write up a plan for working together and stick to it.
Let Us Help You Today
Divorcing spouses who own a family business often have a hard time splitting up their marital assets, but those who do so with the help of a divorce attorney with experience handling high asset divorces often have a much easier go of it. Therefore, if you’re getting divorced in Michigan and would like to discuss your legal options as they relate to your family’s business, or any other divorce-related matter, feel free to contact the Law Offices of Michael A. Robbins by calling (248) 646-7980 at your earliest convenience.