When a family business becomes part of a divorce, it can bring complex challenges for both spouses. Dividing assets, especially a business, requires careful handling to make sure everyone gets a fair deal.
Understanding how a family business gets divided in an Indiana divorce is necessary for managing this aspect of divorce proceedings.
Assessing the value
Determining the value of the business is the first step. This process requires conducting a thorough evaluation of assets, liabilities and potential future earnings. Couples may hire professional appraisers to provide an accurate assessment.
Equitable distribution
In Indiana, the court divides marital assets equitably, which does not always mean equally. Instead, the court strives for a fair distribution based on various factors, including each spouse’s contributions to the business, their financial circumstances and the length of the marriage.
Buyout or co-ownership
Once the couples determine the value, they must decide how to divide the business. They can choose a buyout option where one spouse purchases the other’s share. Alternatively, they can opt to continue co-owning the business with a clear agreement outlining each party’s rights and responsibilities moving forward.
Mediation and negotiation
For help deciding what to do, couples may engage in mediation or negotiation sessions. With the guidance of a neutral third party, they can work towards a mutually acceptable solution. If spouses cannot agree, the court may intervene, and a judge will issue a ruling.
Knowing how family businesses get divided in an Indiana divorce can help divorcing spouses navigate the process more effectively.
