Three Ways to Distribute Business Assets During Divorce in Andover
In the state of Massachusetts, the assets and liabilities that a divorcing couple owns are divided into two parts, including their business. A judge will decide the distribution of the business between the two. Dividing some properties is easier than others, including a marital home. If you are going through the divorce process, you need the assistance of an Andover divorce attorney to ensure you get a fair share of your business assets. When dividing business assets, the following are your options:
With this method, one spouse purchases the business interest of the other spouse. This works if one of you has enough cash to make the purchase. Often, the buying spouse will transfer the amount owed to the other spouse. But, in some instances, the buy-out can be structured to occur gradually. Such an arrangement can relieve significant financial pressure; however, it requires your business to be profitable. Also, it requires one spouse to trust the other to operate their business in good faith.
With this distribution option, you and your spouse will still jointly own the business following the divorce. Another way to make this arrangement work is to allow one spouse to run the business while the other gets payments from the proceeds of the business to satisfy the latter’s share of the business assets. But, this can be risky if the business becomes unprofitable. Unfortunately, co-ownership does not always work for divorcing couples since they may not have a productive relationship after their marriage has been dissolved.
You and your spouse can also consider selling the business and splitting the proceeds. You can also use this method for distributing other kinds of property. For example, you both can agree to sell the marital house and divided the proceeds. But, this can present challenges when the business is not profitable. It can be hard to find a buyer. In addition, selling the business may not be an option if you both do not agree on the value of your business. And if one spouse is still contributing to the business, a sale may be hard to propose. Lastly, market fluctuations can significantly affect the value of the business. Selling it during an economic downturn may not give you and your spouse the greatest payout. So, it could be best to continue to co-own and operate the business until there is an improvement in its marketability.
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