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Dividing your Family Business During Divorce

Dividing your Family Business During Divorce

When couples divorce they are sometimes able to completely separate their lives from one another. Couples with children know full well that they are forever intertwined long after the divorce. So too for couples who divorce and continue to own a business together. Many couples manage to continue to work together as business partners, each valuing the skill set and perspective the other brings to the table. In most cases, however, divorcing couples choose to divide up all of their jointly owned assets, including the family business.

In some cases a judge orders a divorcing couple to sell their jointly owned business. In that case it is categorized either as income or as property. Either scenario is likely to have and impact on your divorce agreement.


If a business is considered income by the court it can be included in the overall evaluation when determining child and spousal support.


If a business is considered property it is divided up between the partners much in the way the family home is divided. One spouse can buy out the other or they can sell and divide the proceeds. If the couple does not reach an agreement, the court can divide the assets of the company in an equitable manner as it sees fit.

Fair market value

If the couple decides to sell or the court orders the sale of the business, the fair market value of the business must be determined. Determining the fair market value of the business is not an easy task. Often each partner has a different opinion as to its value, based on past performance, future performance or the present financial health of the family. When assessing market value the variable factors are assets, liabilities, income and expenses. Ultimately, however, the value is whatever a buyer is willing to pay for it.

If you are divorcing and own a business together here are a few words of advice:

  • Hire a family lawyer — an attorney who is a skilled negotiator can be essential in resolving the issues inherent in dividing a business
  • Develop an exit strategy — if you both choose to retain ownership, make certain that corporate documents spell out exactly what is to be done in the event one of you decides to leave at a later date
  • Anticipate for next time — establish guidelines for valuation and division of your business before taking on any new partners, including a new spouse

The family law attorneys at Fox & Associates C.O., L.P.A. are on hand to help you divide your family business. Call our Dayton offices at (937) 204-1555 or contact us online.



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