A number of businesses in the Kingston area are run or owned by married couples or families. U.S. Census data shows that 3.7 million small businesses in the country are owned by married couples. Divorce can pose significant problems for such business owners.

Many people do not want to close or sell their businesses just because they are ending their marriages, but at the same time they dread the thought of continuing to work with their soon-to-be ex-spouses. Adding to the complications, not all family businesses are owned and operated solely by a husband and wife–often, children or siblings are involved. So, how will divorce affect your business?

The future of your business depends somewhat on how the business is legally organized. Is it incorporated? Are there shareholders? Is it a general or limited partnership arrangement? Who owns the business on paper? In any case, it is likely that both spouses have some stake in the business, and if so each individual needs to think about his or her priorities.

If you do not believe that you should continue working with your former spouse, it may be wise to talk to your family law attorney about the possibility of a buyout. In some cases, both parties may wish to walk away from the business, and then a sale and division of proceeds may be in order. If both parties believe that they can separate their personal lives from their professional work, opting to to continue owning the business together, it is important to consider potential hurdles and address these. For example, if your ex-spouse remarries, what role should the new spouse have in the business?

A researcher with Capella University has studied couples who have remained “copreneurs” after divorce, and she found that some people are able to remain successful business partners after ending their marriages. However, this is not the norm. More often, divorce leads to the sale of a business.

Depending on the circumstances of a divorce and the business partnership, there are a variety of ways to handle a business when dissolving a marriage. When a marital estate involves complex assets such as a family business, it may be critical to work with a skilled New Jersey property division attorney as you navigate through various issues. In such cases, a property division lawyer may recommend bringing in business appraisers, investment advisers and tax experts to help you understand your rights and determine your interests pertaining to the division of marital assets and the future of the business partnership.

Source: NPR, “When Divorce Leads To A Happily Ever After For A Small Business,” Yuki Noguchi, April 17, 2014