If you or your soon-to-be ex-spouse own a business, the court may include it in the divorce settlement. As noted by Business.com, a divorce could involve selling a business and sharing the proceeds.
Some business owners choose to negotiate a sale of their ownership to their existing partners or employees to cover a divorce settlement. The court may, however, also require that a settlement includes a portion of the business income generated during a marriage.
When may I keep my share of a business?
If you wish to keep your business ownership rather than sell it, you may negotiate a payment arrangement with your spouse for his or her portion. The court may also consider a plan to buy out your spouse’s share of a business by giving up your share of other marital assets.
If you decide to sell your business to an existing partner, the agreement may include options to buy back your ownership stake in the future. The proceeds you receive from the sale, however, may classify as marital property. The cash from the sale may divide fairly with your spouse.
How may ex-spouses have liability for business debts?
Debts accumulated during marriage also divide during a divorce. As noted by Kiplinger’s Personal Finance, spouses with joint loans or credit card accounts may include them in their settlement agreement.
The cash and assets included in marital property may go toward paying off debts that either spouse incurred if both names appear on the account, which includes business accounts. Both individuals, however, will need to agree on the fairness of a plan to divide their debts.
Massachusetts requires a fair division of marital property. You may negotiate a plan to divide property and debts in a manner you and your spouse view as fair.