Divorce presents unique challenges for those who own businesses. Even if your spouse has no active role in the business, Kentucky law considers it a marital asset and will divide it equitably. With equitable distribution, properties are split fairly rather than equally.
Obtaining a business valuation is a crucial step in dividing a company. An appraiser can review your business and its financial records, properties, assets and liabilities to determine a fair price from which you and your spouse can negotiate.
Factors the court will consider when dividing a business
In most cases, the court will give the business to the spouse who runs it while giving the other spouse marital assets of an equivalent value. If both parties did work for the company, however, the judge will look at additional factors, such as:
- The percentage of ownership held by each spouse
- If the other spouse can earn similar pay outside of the company
- Whether the business was founded before the marriage
- The value each spouse brings to the business
- How the couple will divide other assets
Depending on your situation, you may be able to buy out your spouse from the company or continue co-owning the business after divorce as business partners. Selling the company and dividing the proceeds may be your last resort when all else fails.
Dividing a company during a Kentucky divorce is a complex process that necessitates making many tough decisions. Being under stress and experiencing strong emotions can tempt you to act rashly. The best way to protect all your hard work is to stay calm and devise a strategy that helps keep you in your position.