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Dividing a business in a divorce

Divorces in Pennsylvania are often stressful, especially when spouses own assets that are not easy to divide. One type of asset that is particularly difficult in that regard is a business that is operated by one or both spouses.

Before a court can make a ruling on how to divide a business between two divorcing spouses, the court must determine who owns the business. If the business was launched at some point during the course of the marriage, then the business is a marital asset that belongs to both spouses. The business will be considered a divisible marital asset regardless of whose name is attached to it.

When a business is considered a marital asset, the spouses may continue to operate the business together, or one spouse may buy the other spouse out of the business. Another option that divorcing spouses have is to sell their business and then divide the profit. If a business was launched prior to the date of marriage by just one spouse, dividing the value of the business is more complicated. Although the business will technically be one spouse's personal property, the appreciated value of the business is marital property that must be divided.

Because Pennsylvania courts follow the principle of equitable distribution , marital property is divided in a way that the court rules to be fair. This means that a jointly owned business may not be divided equally if one spouse invested more time and effort into its operation. A divorcing spouse who is fighting to keep their fair share of a business may want to have representation from an attorney.

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