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What happens to your business in a divorce

On Behalf of | Nov 7, 2018 | Firm News

Divorce heralds a number of changes for Massachusetts couples. If you own a business, figuring out its fate in the property division process will likely be a top priority for you.

If your business counts as a separate asset, you may have a better chance of keeping it out of division, although this is not guaranteed. This is more likely if you established the business before marriage, your spouse did not contribute to it and all relevant accounts remained separate from marital property. However, the income the business generated during the marriage and any assets purchased with it may still count as marital property and need to be divided.

Prior agreements

Another way to keep your business out of division would be to include an appropriate provision in a valid prenuptial or postnuptial agreement. If you did not make one before deciding to divorce, you will need to look for other solutions.


Once the business becomes part of the asset division process, you will need to obtain an accurate professional valuation from an expert in this area. This is a necessary step no matter what you plan to do next.


One option would be to buy out your spouse’s share of the business. If the marital estate has other assets that would add up to an equivalent value, you may agree to give them up rather than pay cash.


In some situations, you may not want to hold on to the business. If so, it can make sense to sell it off and split the proceeds.


Some divorcing couples feel able to continue owning the business together. You may be able to do this if one of you acts as a silent partner who does not participate in the day-to-day operations, or if the two of you can preserve a cooperative relationship.

There are many factors that affect how a maximally fair division would play out in any given case. Consulting an experienced attorney can help you understand the various aspects of your situation and make informed decisions.