A couple in Kentucky may own a small business that has seen considerable success over the years. However, their marriage may have not been so successful and they may find it is in their best interests to divorce. When doing so, they will have to make a decision about what to do with the family business.
Option one: one spouse keeps the family business
Sometimes the spouse running the business wishes to keep doing so post-divorce. In this situation, that spouse will keep the business and buy out the other spouse’s interest in it at a fair price. This price may be a reflection of the business’ appraised value. Generally this type of transfer is not taxed, as it is a transfer of property incident to divorce.
Option two: both spouses keep the family business
If both spouses wish to continue being involved in the family business, they may choose to continue on as co-owners following their divorce. This approach requires a certain amount of cooperation and amicable communication. Agreeing to the role each of them will play in the business post-divorce can help.
Option three: both spouses sell the family business
Sometimes neither spouse wants to continue owning the business post-divorce. It may not be financially feasible, they may want to cut ties with one another or they may be interested in branching out to new endeavors post-divorce. Couples who choose this option will have to agree on a sales price, and may need to continue to work together in running the business until it is sold.
Learn more about property division in Kentucky
Those in Lexington who are going through a divorce, they will want to make sure they understand the property division process, especially when it comes to high-value assets such as a business. This post does not contain legal advice. Our firm’s webpage on divorce may be a useful resource for those who want further information on how to protect their interests in a fair manner.