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Pitfalls for business owners in a divorce

Business owners in Kentucky may find their businesses in jeopardy if they get a divorce. A document known as a buy-sell agreement can set out the terms if one owner divorces. It might include how the business will be valued and how the divorcing partner's stake can be bought out. This can also protect other partners in the business. Without such an agreement, partners could find themselves in business with one of their ex-spouses.

When one partner in a small Tennessee company was going through a divorce, his fellow business partners had to borrow money to buy out their partner. In other cases, the financial strain caused by the divorce can mean business owners bring negative emotions into the workplace, and that affects their employees. This was the case for one business owner who felt that it was fair for his ex-wife to receive half the value of his business but who also had to borrow money to pay her. He eventually had to leave the company because of the damage he did to his relationship with his employees and partners.

One woman gave up her company to her husband, who ran the business with her in the last few years of their marriage. She did so in exchange for custody of their children and the home.

Many different arrangements for property division may be negotiated by a couple with the assistance of their attorneys. Negotiation may give them flexibility they would not have if they went to court although in some cases this may be necessary if one spouse will not cooperate. A judge will consider a non-owning spouse's contribution to the success of the business, including time spent caring for the home and children. An agreement reached in negotiation must usually be approved by a judge as well.

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