Divorce poses many challenges, one of which may include determining the fate of a business. If you own a business and are going through a divorce in Tennessee, you may question what will happen to your company.
Understanding some general rules about businesses and divorce can offer some clarity, though every situation is unique.
The effect of divorce law on businesses
In Tennessee, the law views assets acquired during marriage as marital property and divides them in a divorce. Your business might fall under the category of marital property if established during your marriage or if it benefited from the investment of marital assets.
The business’s division will depend on several factors, including its value and each spouse’s contribution. Make sure to have a professional valuation of your business to ensure a fair division.
Your business’s potential outcomes
Your business could have several potential outcomes in a divorce.
- You keep ownership. If you keep full ownership of the business, you would have to compensate your spouse for their share of the business’s value.
- Co-ownership. This situation would mean both you and your ex-spouse continue operating the business together. It could work if you have a good working relationship, but it could prove challenging if your relationship is contentious.
- Sell the business. You could decide to sell the business and divide the proceeds. This option ensures a clear separation of assets but it also means giving up the business you have worked hard to build.
Divorce can bring stress, and uncertainty about your business’s future can amplify that stress. Keep in mind what is best for you, both personally and professionally. Although you are going through a period of transition, you can successfully navigate through it with careful consideration.
