Proud Neighbors In Cincinnati

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2 ways a family business can influence the outcome of divorce

On Behalf of | Jul 10, 2023 | Divorce & Family Law |

Married professionals in Ohio often inherit, buy into or start businesses. A family-run business can be a way for someone to control their income and their schedule. However, the pressure of managing a business can eventually impact someone’s marriage.

Even if running a company doesn’t strain a marital relationship, it is possible that the business will be the biggest complicating factor should either spouse file for divorce. There are a few unique challenges that relate to owning a business while divorcing in Ohio.

Concerns about employment

Those running a business often hire their children, spouses and extended family to fill roles within the company. Having both spouses employed at the same business may not be very stable during or after the divorce, which means that one spouse may need to prepare to transition to a different job. It can sometimes be a challenge to negotiate how to handle that process, especially if both spouses fulfill highly-compensated, professional roles at the company.

Uncertainty about valuation

There are many different ways to establish the economic value of a business, and many of them are at least somewhat subjective, as they involve estimating factors like enterprise goodwill and future revenue levels. Spouses may disagree about what the company is worth and how much future revenue it will likely generate. They may need to bring in outside professionals to help with the business valuation process so that both spouses feel comfortable with the final determination.

Concerns about ownership interests

Once people know what the business is worth and which spouse(s) will continue working at or operating the business, it then becomes necessary to negotiate the appropriate way to compensate the other spouse for their interest in the organization. Approaches may include making concessions and other areas of property division or even agreeing to spousal support, which other states call alimony.

Unless spouses have a prenuptial or postnuptial agreement already addressing how they will handle the business in a divorce, they can expect that the company that one spouse started or that both spouses own jointly will be a primary source of conflict in their upcoming divorce. Identifying the likely challenges related to dividing a marital estate that includes a business – and addressing those challenges proactively (and cooperatively, when possible) – can potentially take some of the uncertainty and acrimony out of the divorce process.


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