How Can a Family Business Complicate a Divorce?

Some people start small businesses after gaining local fame for things like barbecue sauce or Earl Grey cupcakes. Others take over family businesses or invest in franchises. Additionally, many professionals with state licenses set up their own practices.

Running a small business can be both challenging and fulfilling. Many enjoy the thrill of managing their own careers and income, often working alongside family members. However, when someone files for divorce, owning a business can complicate the process. How might a business or professional practice impact divorce proceedings? Here at ShounBach, we have dedicated family law attorneys to help you understand family businesses and divorce in Virginia.

Family Members May Work for the Company

Beyond their investment in the business, individuals may also earn their income by working within the company they run. They may have employed their spouse and in-laws, creating a complex scenario if they decide to divorce. In such cases, they may need to negotiate with their spouse and other family members to arrange a departure timeline. Additionally, they may have to work out contracts to continue employing family members both during and after the divorce.

Determine if the Business is at Risk of Division

The value of the business may be included in the marital estate and would then need to be divided as part of the divorce settlement. Factors such as when the business was started and the extent of investments of time or money made during the marriage can impact whether the business is at risk in the divorce. Spouses with marital agreements sometimes have the advantage of shielding their businesses from the effects of divorce.

Protecting the Organization From Liquidation

When business owners divorce, continued joint ownership or a buyout of your spouse can be highly stressful outcomes. To avoid these worst-case scenarios that could jeopardize their business assets and future income, careful planning is essential. Our family law attorneys can help you understand the various outcomes of family businesses and divorce in Virginia.

From determining the company’s value to resolving property division disputes, numerous factors can influence the outcome of a divorce involving a family-owned business. Identifying and addressing potential issues early on can help mitigate conflicts and better prepare individuals for high-asset divorce proceedings.

Family Businesses and Divorce in Virginia

If you have questions about family businesses and divorce in Virginia, the Virginia family law attorneys at ShounBach are here to help. We handle a wide range of family law and divorce matters. We can assist people throughout Northern Virginia from our office in Fairfax. Contact us today at 703-222-3333 or through our online contact form to find out what we can do for you.