How Businesses are Divided in a Divorce

Divorce and Business.

You wouldn’t think these 2 things go hand in hand but they often do. That is why Sassy Litigations does both divorce and business. More and more people are partnering up not only in the martial sense but also in the business sense as well. Whether one spouse owns and runs a business or the couple is a couple-preneur that business will come into play during a divorce.

So How does a Business Get Divided?

Jeff Bezos’ divorce has sparked so much conversation about him losing “half” of Amazon. But is that really how a business is divided in a divorce?

First, and I have stated this time and time again. Washington is not a 50/50 state. Assets in a divorce are divided based on what is “fair and equitable”. So that may not be 50/50 but it could be.

Generally, the first step in dividing a business is to get a business valuation. You need to know how much a business is worth before you can divide it. Then there are 2 main options, award the business to one spouse and have the other spouse buy them out. If that doesn’t work then the business may be sold and the proceeds divided in a fair and equitable way. Another potential option is for the couple to stay on together and work the business. Of course for this to really work the couple needs to get along.

This is just if the couple owns the business together. What if the business is owned by one spouse and maybe a business partner? Things can get more complicated. Did you have the business before marriage? Did you start it after? These questions will determine if the business is separate or community property. Also whether your future ex-spouse will get anything from the business or your share of the business. These details will are better left for another post.

If you are divorcing and own a business you will want to consult an attorney skilled in this area to help you decipher the complicated web of the law. If you have a business and are considering marriage maybe a prenup is the way to go, The Princess can help with that.

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