By Lisa Marie Vari on Google+
It is not uncommon for our Pennsylvania family lawyers to represent a client that co-owns a business with his or her spouse, and one their main concerns from the get-go is what will happen to the family business upon divorce. Luckily for these Pittsburgh divorce clients, they have the power to decide, they just need to come to an agreement with their soon to be ex-spouse. Options that are available to the parties, and which may be ordered by a judge if the parties can't agree amongst themselves are: selling the business, one spouse buying out the other spouse's interest, or continuing to operate the business as joint owners.
Selling the Business:
If both spouses agree, they can put a family business up for sale and split the proceeds equally between them. This scenario may seem easy enough in theory, but complications arise when there is no market for that particular business and a buyer can't be found. Forcing a sale of the business, is also a common situation in cases where the spouses can't agree and the PA family court judge needs to make a decision about the future of the business.
One Spouse Buying out the Interest of the Other:
If one spouse agrees to give up his or her share of the business, the other spouse can gain full control of the business upon paying the other the fair market value of half the business. This situation is common where the family business happens to be a professional or have some skill set that would better allow them to run the business. For example, if the business happens to be a doctor's office and one the spouses is a doctor, the doctor spouse is likely to want to keep that business and he or she can gain full ownership of it by paying the other spouse half the value of the business.
Continuing to Operate as Co-Owners:
If the couples agree, they can continue to operate the business together despite filing a PA divorce petition. You may not see this situation too commonly, and it would obviously only be successfully with spouses who can remain amicable, if the spouses are able to get along and believe they can continue to work side by side, this option allows them both to remain involved in the business they built up during the marriage.
Should you find yourself facing a divorce and are unsure of the best course of action to take with regards to a family business, contact our PA Family Lawyers at Lisa Marie Vari & Associates. Our Pittsburgh based divorce team will work with to weigh the pros and cons of each potential scenario as it relates to your family business in the midst of a divorce.