Pennsylvania families who are concerned about protecting their children's business interests in a divorce from future spouses may want to look at trust options. However, a trust will not solve the issue of dividing a business if a couple owns one together and gets a divorce. One may be unable to buy the other out because most of their assets may be tied up in the business. If a couple has a prenup in place, that might cover the process, but if they do not, there are other options. A buy-sell or buyout agreement prepared before the wedding might be an alternative to a prenup.
The couple might continue to own and run the business together, but this can only be done if there is not too much emotional turmoil. An individual who cannot afford a buyout might want to look into getting a loan to do so or a property settlement note. Another option might be to bring in another partner. This could be particularly helpful if the business is in debt but should also be accompanied by a buy/sell agreement.
A couple also has the option of selling the business and splitting the proceeds. However, if the business is one that is difficult to sell, this could mean the two are financially tied to one another longer than either is comfortable with.
Individuals who are going through a divorce may want to discuss these options with their attorneys along with issues around other property such as retirement accounts. Strategies could vary depending on the circumstances surrounding the business and each person's financial situation. For example, one person might be passionate about running the business while the other has little interest in doing so, or both might agree to sell the business because they would prefer to move on to something new.