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Do you need to buy your spouse out of your company in a divorce?

On Behalf of | Sep 14, 2022 | Business Division

Getting divorced is never easy. Ending a marriage comes with all sorts of conflicts related to your personal relationship and also your financial holdings. When your spouse has also been with you while you started a business and has an interest in that company, your divorce can be a lot more complex.

You probably don’t like the idea of running your company with your ex in the future. Making a clean break at the end of your marriage will likely require that you also cut professional ties with one another. The easiest option may be to buy your spouse out of the company.

You need to put a price on the business to make a fair offer

The business that you own with your spouse isn’t just a representation of your current stream of income or how you invested your mutual capital in the past. It also likely represents a stream of revenue and income for your family in the future.

Putting a price on the company is often the first step toward making an offer to buy out your spouse. You will also need to think about future revenue and factor that into the offer that you make. Your spouse may have certain expectations based on their contributions to the business or household during your marriage.

It can be very difficult to be objective about the value of your company. The same is true about trying to negotiate divorce terms with your spouse. Understanding your rights as a divorcing individual and business owner will make it easier for you to secure a good settlement in your upcoming divorce.