Many people in Cleveland and other parts of the greater Chattanooga area, as well as those throughout Southeast Tennessee, have invested a lot of time and energy in building up a family-held or other small business. For many, their share in the business is their most valuable financial asset.
What this means is that in the event of a divorce, or sometimes even in the event of breakup between an unmarried couple, a lot is at stake. In addition to the fact that a person stands to lose a good chunk, perhaps around half, of his or her investment to the other spouse, the divorce could also spell the end of the business altogether.
In other words, if a couple cannot agree on how to divvy up the business as a practical matter, and they are unwilling or unable to both operate the business, then there is a chance the business will have to simply be sold and the proceeds divided. Selling a business is an expensive process and, depending on the market conditions, could be a losing proposition from a financial perspective.
There are ways to prevent a forced sale of the family business upfront. Some couples who have business interests may elect to use prenuptial agreements to set out what will happen to a business in the event of a divorce or, for that matter, other events, including the death of one spouse.
Moreover, even once a couple has separated, other options short of selling the business may be available. For instance, the spouse wanting to stay involved in the business could offer to trade off other assets, or he or she can take on more than his or her share of the marital debt, in order to protect the business. In other situations, a loan or other payment arrangement may be possible. Experienced family law attorneys can help business owners explore their options.