When you build a business from the ground up, it becomes more than just a place where you work. You have pride in the effort you put into making your company successful. But as you go through a divorce, what will happen to it?
Under New York divorce laws, you and your spouse will divide all marital property. But when your business is one of your largest assets, you worry about how the division will affect it. Depending on your situation, you may have a few different options for your company.
You keep your business
If you started your business before marriage and kept it separate from marital assets, a judge may consider it separate property. You only have to divide the value of the company’s income with your spouse. If you paid yourself a fair wage and have records showing that your business is separate, you may be able to keep it that way.
However, proving this can be complicated. And you may still have to give your spouse a significant share of the company’s cash.
You buy out your spouse
If your spouse has a share in your business, you can buy it out. Whether you both had ownership or the judge rules that your spouse gets a cut, you can pay to make yourself the sole owner.
If your business doesn’t have enough cash to cover this, you may find yourself cutting it dry. While a buyout can make sure you keep your company, you can also damage it and lose it anyway.
The two of you remain owners
If you can both agree to keep the business running, you can both stay as owners. However, you may find that working with your former spouse causes too much tension.
You sell your business
If none of the above work for you, you may have to sell your business and split the profits. While this route can be challenging for something you created, it may be your only option. Fighting to keep your company running while trying to pay off your ex may only drain it until it closes anyway.
You will have to decide what happens
Dividing a family business is never an easy process. Your specific situation with your spouse and your family will determine the best route for you to take.