The Census Bureau estimates that married couples own over three million businesses in the U.S. Given, however, that the statistic that 50 percent of all marriages will end in divorce, business owners who were once married but now divorced must find a way to compromise and work together post-divorce or sell their business.
Michigan couples who are also business owners will find it interesting to know that when irreconcilable differences arise in a marriage, in the absence of a prenuptial agreement regarding what to do with the business, the ex-spouses may have to work together post-divorce. In fact, a lawyer couple who started a civil litigation firm together, built it into a 50-person operation, but as their firm grew, their personal lives deteriorated. They ended up divorcing but had to decide whether or not to continue to run the firm together. At the time of the divorce, the wife was not an equity partner in the firm and was worried that she would lose her job. Despite that their personal lives had fallen apart, the two lawyers put an agreement together that the wife would stay in the business for three years. Post-divorce, the ex-couple is still working together.
Families who have experienced divorce, are going through divorce proceeding or who know someone who is divorced understand that divorce is not an easy process. Adding an extra complexity of owning a business together makes the process even harder. Business owners who are married should understand the implications of a divorce on their business relationships.
Being divorced does not mean that the ex-couple cannot run their business together but in the absence of a prenuptial agreement or arrangement, it is important to seek legal advice and get professional help on the matter to find feasible, affordable solutions to not only save the business, but also, to have a respectful post-divorce business relationship.
Source: The New York Times, “When Couples Divorce but Still Run a Business Together,” Bryan Borzykowski, Dec. 5, 2012