Business owners in Tennessee may be concerned about keeping their company healthy and stable. These concerns may escalate when they decide to divorce, especially if the business is successful. In many cases, a privately owned business is one of the largest marital assets at stake in the property division process. Some companies have been undermined through high-conflict divorces. However, it is quite possible for successful entrepreneurs to emerge from a divorce with a mutually acceptable settlement that protects the future of the company.
Some divorcing spouses with an amicable relationship may find that they do not need to divide the company at all. They may be able to keep going as business partners even when their personal relationship has ended. In other cases, one spouse is much more involved in the business. Here, it typically makes sense for that spouse to buy the other out as part of the divorce settlement. The spouse leaving the business could receive a larger share of other marital assets, such as the family home, investment accounts or retirement funds, in exchange for their stake in the company.
In other cases, the business may be worth so much more than other assets that a buyout cannot be completed during the divorce settlement. In this case, both parties may agree to a phased process, in which one party gradually buys out the other. This may serve as a sort of spousal support until the transaction is completed, and the leaving party’s equity stake in the business would decline as payments are made.
When entrepreneurs make the decision to end their marriage, they may worry about the impact on their financial future. A family law attorney may represent a business owner to successfully negotiate a settlement that addresses property division and other key issues.