Did Your Marriage Flop? Don't Flip Out If You Happen To Own A Business Together: You Have Options

With television celebrities Tarek and Christina El Moussa divorcing, it was easy to predict the end of their hit reality show, "Flip or Flop," as well. Not many divorcing couples who work together in a family business (on or off the screen) can continue working together after a divorce. If that's your situation, what are your options?

Try to leave the business as it is.

Again, continuing to work with your ex-spouse on a daily basis in the business you built together isn't easy, but it is something that you can try if both you and your ex-spouse are both willing to set your marital issues aside while you're working. If the divorce was amicable, you're likely to have the most favorable results.

However, even if you do manage to continue to work together for a while after the marriage is over, it isn't unusual for the same issues that ruined the marriage to creep into the business. In addition, it can get emotionally messy if one or both of you moves on and begins to date someone else.

Have one member of the couple buy the other out.

Unless you have a written agreement about how much it would cost to buy the other person out of their share of the business, which is unlikely, there are a couple of ways that can be accomplished.

One method is to determine the worth of the business and then have one party pay the other for half of that amount using money that was theirs separately (and not part of marital assets). If that's not possible, one spouse may be able to get a business loan that will allow him or her to buy the other out. A third option is to use other marital assets as a trade-off. If you're the spouse who wants to keep the business, for example, and it's valued at $200,000, you would give up an additional $100,000 of whatever marital assets would be yours to keep in order to buy out your spouse. That might work well if you have something like a house with a considerable amount of equity in it and your spouse wants to keep the house in exchange for the business.

Keep an eye toward the future.

There's one other hitch that can be a sticking point for couples who own a business together when it comes to dividing up the business: a non-compete agreement. If the industry you are in is highly competitive (and most are), you don't want your spouse setting up shop in a new business in the same area—especially since he or she is already privy to your inside practices and any business secrets that you have.

That may not be a problem if your spouse is interested in moving on to other things, but it could be an issue that could cause a dispute that requires some serious mediation.

For more information or to discuss your situation, consider contacting a divorce attorney in your area, such as Susan M Caplin.