Keeping a Family Business Intact During a Divorce
If you have spent years building your family business, the last thing you want is for it to be decimated during your divorce. There is no doubt that divorces can sometimes do that to a business, but with proper planning and advice, your business can remain intact for many years to come.
Here are some tips to help your business through this rocky time:
- Don’t make any risky business decisions: When your divorce is pending or imminent, it is no time to make controversial decisions, such as diversification into a new business line without first consulting with your lawyer.
- If both spouses operate the business, put it in trust: This prevents one spouse from selling the business simply to spite the other spouse.
- Obtain a valuation: Arrange for a business valuation, but be aware that valuations often vary a great deal. You need to know what the approximate value of the business is to best protect it.
- Hide your divorce from business associates and customers if possible: Investors and customers often get nervous when they hear that principals of a business are getting divorced. They may be less willing to invest in the business. If the word gets out, it can affect the ability to obtain credit and may even decrease future revenue.
- If you want to keep the business, find a way to pay off your spouse: Be willing to give up other assets to keep the business or come up with creative financing to buy your spouse out.
- Speed is desirable: One of the best ways you can help your business survive is to get the divorce over with as quickly as possible. This way, you can get back to your job of guiding your business rather than spending years in litigation fighting over it.
With proper planning and advice from your Rhode Island divorce lawyer, your business can thrive for many years to come.