When a marriage ends, one of the most difficult things to go through is watching a life built by two break apart. In a divorce situation, under family law rules, North Carolina residents may see things go on the block — the family home, cars, furniture. Everything is up for division and since North Carolina is an equitable distribution state, no one knows for sure how everything will turn out, which makes it especially worrying if one of the assets is a business.
There are options
It would be the ideal situation if spouses could agree on decisions regarding a business without court intervention, even though a family court judge will still approve or reject any divorce settlement that is reached. In any case, keeping business assets separate from any joint accounts is crucial. But if doing that is too late, the following choices are available:
- Agree to give one spouse other assets in exchange for his or her interest in the business.
- Have one spouse sell part of his or her stake in the business to finance a fair trade with the other spouse.
- One spouse agrees to pay the other installments over time for his or her share of the business.
- Spouses continue to own the business together with a sound contract between them.
- Sell the company and divide the proceeds.
Having the business liquidated is not the ideal situation, according to experts, especially if it is the main source of income. Also, it’s unlikely the full value of the business wouldn’t be realized if sold. In any case, the business and its assets will need to be valuated and that is a complex process.
Divorce can be potentially disastrous to a business. It can be draining on resources, time and mental health. It is important to prevent these things from occurring since whatever the decisions made regarding the business, the goal is to retain as much of its value as possible. Discussing the options with a lawyer experienced in family law may provide some answers to worrying questions regarding divorce and a business.