Going through a divorce is never easy. Even if things end on good terms, it still creates tension and can lead to things as small as awkward conversations and as major as court proceedings.
When you have a family business with your spouse, though, it creates an entirely new set of issues to discuss during a divorce. Maybe, at one point, you and your spouse were involved in a workplace romance. But now you’ll have to decide what to do with the business as you move forward.
There are plenty of things to consider when making your decisions. Do you want to stay in the business? Do you think you’d still be able to work with your former spouse? Will you need to look for a different job during this major life transition? Or will you divide your assets and sell the business?
Let’s look at some of those options so you can decide what might work best for you during this challenging season of life.
Committing to Work Together
A 2007 survey discovered that about 3.7 million businesses are owned and operated by married couples. Statistically speaking, some of those couples are going to get divorced. So, what happens to the business?
In some instances, the couples commit to the project and decide they can continue to work together. This is about putting the business first and your relationship second. But if there will be contention between the two of you, working together may actually not be what’s best for the business.
Both people have to be on board for this scenario to work. If one person isn’t as into the business as the other, they might want to sell it. So, as tense as it may be, a conversation about your business with your soon-to-be ex-partner is crucial if you want to keep working.
There are pros and cons to working together. You’re showing a united front for the business itself, rather than letting your divorce get in the way. If you have children, it’s important to keep their needs in mind, too. They’re going through the trauma of divorce just as much as you are, but they may have a harder time working through it on their own. In some cases, counseling may be needed to help your kids understand their feelings more, and express them in effective and positive ways. Working together is a great way to show your children you can still get along, and it can create less drama and tension within your family (especially if your kids also work in the business!).
Some of the drawbacks include becoming a part of the “rumor mill” at work. People are undoubtedly going to whisper about your divorce or your relationship for a while, and it’s something you’ll have to brush off until it passes. You’ll also have to learn to treat your former spouse more like a business partner than a life partner. All of these transitions take time and patience, but they’re not impossible.
When the Business Falls Apart
If you both agree that you aren’t able to work together and continue the business, you have a few options to consider.
One of you may want to keep the business. That’s fairly easy if your former spouse wants nothing to do with it. If it’s solely in your name already, you may have to divide the income that was brought in during your marriage. Big business owners like Jeff Bezos have had to do such things in their failed marriages. If you both owned the business equally, you might have to “buy them out.” One of the cleanest and easiest ways to get the business solely in your name is to ask for it in a divorce settlement. It’s something your former spouse will have to agree to, and it’s likely they’ll want a portion of the money from the business. But if you’re committed to moving forward with your career, it’s often worth it.
In some cases, the best option might just be to walk away from the business entirely. That means dividing your assets, which will usually have to be done with the help of attorneys. Before you go that route, make sure you understand what a business is worth in a divorce and how things are divided up in your state.
The Business of Divorce
When a marriage breaks down, it doesn’t necessarily mean your family business has to break down, too. Unfortunately, a lot of what happens to your business will depend on your personal life and whether you’re able to continue to work with your former spouse or not. If things are contentious or tense, it may be better for both of you to cut your losses and walk away.
But if the business is more important and bigger than the downfall of your marriage, it can be worth it to stay. You know yourself and your partner better than anyone else. So, while there are pros and cons to staying in the business, it’s a very personal decision to decide what to do.
The most important thing is to make sure you’re well-informed about the outcome of every possible scenario. By educating yourself as much as possible, you’re less likely to be surprised or disappointed, and you can focus on getting back on your feet after a divorce.
Written by: Indiana Lee, BOSS contributor