Many of the people that we represent own a business where either one or both of the parties have been working. Their question, of course, is, “What happens to the business? Is the court going to force the sale of the business?” That would be highly unlikely. It’s possible, but highly unlikely. Typically how the business is handled is: in a collaborative case we would hire a neutral business evaluator to value the business, and the business evaluator would come in and evaluate the business and give a range of that business’s worth. Then the spouse that it is determined will keep the business (which most logically would be the one working in the business, but not always) that spouse would be awarded the business and he/she would have to buy out the other spouse.
Perhaps how they buy out the other spouse is by offsetting the value with other assets like the house or 401k if there is enough value in the house and/or 401k to do so. Or, if there are not any other assets of much worth because the couple has poured their money back into the business, it may be that the way the spouse staying in the business buys out the other spouse is by making payments over time, that look like an alimony payment, basically.
It could be a monthly payment over many years or it could be a lump sum payment at some given time in the future of the company. Let’s say that they know something significant is going to happen in the future and there will be a point where they could make a lump sum payment. Perhaps you would have a monthly payment until then and then a lump sum payment at that time.
Or a popular provision would be a monthly payment and if the company is ever sold then a full payment would be made as a lump sum at sale. There are other options but these are the most common ways to handle a family business.
9 Comments
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I don't think the title of your article matches the content lol. Just kidding, mainly because I had some doubts after reading the article.
I don't think the title of your article matches the content lol. Just kidding, mainly because I had some doubts after reading the article.
Can you be more specific about the content of your article? After reading it, I still have some doubts. Hope you can help me.
Can you be more specific about the content of your article? After reading it, I still have some doubts. Hope you can help me.
Your point of view caught my eye and was very interesting. Thanks. I have a question for you.
I don't think the title of your article matches the content lol. Just kidding, mainly because I had some doubts after reading the article.
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