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How divorcing couples handle businesses in Virginia divorces

On Behalf of | Sep 9, 2022 | Divorce

The decisions you make during your divorce will affect your financial stability for years to come. Many couples struggle to negotiate property division arrangements, especially when they have certain assets that represent the vast majority of their personal wealth.

A business could be worth hundreds of thousands of dollars. Even if the company does not have many resources to its name, it may be the primary source of income for your entire family. Worrying about what may happen to a family business in a divorce might make you feel trapped in an unhappy marriage.

How do Virginia couples deal with a family business in property division proceedings?

They agree for one spouse to retain the business

The simplest solution for a business in property division proceeding is to put an appropriate value on the business, determine what percentage of the company is marital property and then compensate one spouse accordingly.

The spouse with family ties or the most invested in the business can continue running the company and relying on it as a source of revenue. The other can receive their fair share of its value in other property.

They can sell the company

If the two of you run the company jointly and neither of you can manage it entirely alone, then selling the company to someone else could be the best solution. Although both of you will need to look for new work or start your own businesses, you will have the proceeds of that sale as a nest egg or whatever path forward.

They can agree to continue working together

In a minority of you, spouses that co-own businesses may decide that continuing joint ownership is the best approach.

Maybe the company requires several more years of development before it will secure a profitable price on the market, or perhaps the business is big enough that both of you remaining shareholders will not negatively affect its operations. Thorough contracts are often necessary when ex-spouses agree to joint ownership or management of a family business.

If you can’t reach a solution on your own, then a judge will have the final say in litigated property division proceedings. Learning more about the Virginia laws that govern divorce proceedings can help you plan for the best solution at the end of your marriage.


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