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Divorce and business owners

On Behalf of | May 26, 2022 | Divorce

Divorces often have more impact on some families than they do on others. Some are simple, and some can be very complicated when the family operates a business. This can apply in equitable distribution states like South Carolina where the business may or may not be deemed as marital property. Even if one spouse is the primary owner of the operation, the other will at least share in the profit it generated during the marriage. Many times this is the most important aspect of the divorce, and it can have a lasting future effect on the business.

Determining value and individual equity

The ultimate issue in a divorce that involves a business is determining equity for each party. In some cases when the business was begun by one spouse well before the marriage, the only claim the other spouse will have will be for profits generated during the course of the marriage. The increased value of the business during the marriage can be a factor as well, and many times it is best to have the business evaluated by a professional.

Options to save the business

There are many situations where a business that has been very successful in the past but has declined in profitability could potentially be closed due to a divorce settlement issue. This can commonly be avoided in the property division agreement by giving up other marital assets to keep from selling the business out of financial necessity.

It is important for couples to remember that just because they are divorcing does not mean they cannot be reasonable when property is being divided. And while some business divorces can be messy, others can be very negotiable. For these couples, agreeing upon a continuing percentage of ownership works well. This is often the most effective method of settling this issue.