Family businesses and divorce
A business can be one of the most significant assets an individual may own. Florida couples who own one together may be able to take steps to protect it from the effects of a divorce.
For co-owners who have not yet married, a prenuptial agreement can be used to provide a measure of protection for a family business. The document would specify how the company would be treated in the event of a divorce. If properly drafted and held valid, this would prevent a court from making a contrary decision.
Creating a buy-sell agreement before marriage is another alternative. Also referred to as a buyout agreement, itestablishes a contract between the co-owners of a business and details how the business should be handled if an owner dies or is forced to or decides to exit the business. Preferably, the agreement would compel a former spouse to sell back the interest of the business that was received in a divorce settlement back to the co-owners at a price calculated by a particular valuation method.
One of the simplest ways to help a business withstand a divorce is for the spouses to remain co-owners, even after they split. However, this may not be a viable option for couples who have a contentious divorce after which there may be lingering feelings of resentment or antagonism.
Property division can be one of the more contentious divorce legal issues that a couple has to face, whether or not the assets include a business. Rather than have the decision made by a judge, estranged spouses may want to have the assistance of their respective attorneys when trying to reach a negotiated settlement.