If you are a business owner in Massachusetts who is seeking a divorce, it’s important to know that your business will be up for equitable division during the property division stage of things. In fact, before your divorce can be finalized, a property division settlement that addresses how all property—including your business—will be divided must be reached. Here’s an overview of what you should know about business ownership and divorce in Massachusetts, including laws around equitable division and options for dividing a business in a divorce—
What Does the Law Say About Business Division in a Divorce?
Massachusetts is an equitable division state. This means that all of a couple’s assets must be divided in a way that is equitable, or fair and just. Note that equitable does not necessarily mean equal; a court may divide assets in a way other than a 50/50 split. If this business has been operated throughout the course of the marriage and used to generate income for both parties to the marriage, it will likely be considered marital income, even if it was started by one individual prior to the marriage or was given to one individual through gift or inheritance. Even if it is found to be separate property, however, the court can still divide separate property as it sees fit and, at the very least, will consider the value of each party’s separate property when making a determination about division of property.
Options for Equitably Dividing a Business in a Divorce
There are multiple options for equitably dividing a business in a divorce depending on the goals of each party and whether or not business continuation is a viable option. Potential solutions for equitable division include:
- Selling the business and splitting the proceeds 50/50
- One party buying out the other’s half of the business
- Both parties continuing to operate the business as partners
- Exchanging the business for another asset (i.e. one party gets to keep the business and the other party gets to keep the house and vehicles)
- One party continuing to remain on as a profit-earning stakeholder with the other party operating the business
When you and your partner are dividing a business, it’s very important that you understand what you want from the negotiations. If you are passionate about keeping the business, you may have to compromise and give up another asset; if you are okay selling the business and splitting the proceeds, this is typically the easiest way to proceed.
Why Work with a Skilled Divorce Attorney in MA?
The most important reason to work with an experienced divorce attorney is that your divorce attorney will have one primary job: advocating for you. If keeping your business is important, your attorney will work hard to strike a property division agreement that favors you. Without a skilled attorney on your side, you risk giving up more than you gain.
Call the Law Office of Heather M. Ward Today
At the Law Office of Heather M. Ward, Attorney Heather Ward has years of experience representing business-owning clients during the divorce process. To schedule a consultation and learn more about the law and your rights, call our office directly at (617) 903-8955 or send us a message online to get started.