For business owners in Pennsylvania, divorce can be a particularly challenging time. When the venture is a couple’s major asset or it carries significant sentimental value, this can be especially true. While a divorce can involve an array of personal and financial entanglements, dividing a business has its own unique circumstances. Unlike a bank account or investment fund, it may be difficult to agree on the actual market value of the business. Spouses may be tempted to overestimate or underestimate the value of the company, making it necessary to bring in an independent expert to review financial statements and produce a valuation.
This can provide an important starting place for negotiations, as can each spouse thinking about his or her vision for the future of the company. The most common way of handling a family business in a divorce is for one spouse to keep it. That spouse will essentially buy out the other party by ceding a greater percentage of other marital assets like investments, property or real estate. However, this can be more complicated when the business itself is by far the most valuable marital asset. In this case, the divorce settlement may include provisions for ongoing payments to the other spouse until the business is fully paid off.
Other couples may choose to stay together as business partners even while they end their marriage. This choice usually only works for the most amicable of couples where both partners play a strong role in the company’s operations.
When business owners go through a divorce, they may have a number of questions about how this will affect their finances in the years to come. A family law attorney can helps such a client reach a fair settlement on other matters in addition to property division when a business is involved.