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Paying share payments may help to protect business from divorce

On Behalf of | May 18, 2017 | Divorce

A businessperson’s worst fear when going through a marital split-up in Alabama is losing his or her ability to continue making money through the business in the future. After pouring their hearts and souls into their companies, businesspeople naturally want to do everything they physically can to safeguard their entities from divorce. However, giving up a portion of the business to a soon-to-be ex may be necessary if he or she took part in the company operations or gave up a career to stay home with the children.

One possible way to protect a business from divorce is to pay a future ex’s share of this company over time. The ex must agree for this to happen. For instance, it may be determined that a business is valued at $5 million according to a current fair valuation of it. In addition, perhaps it is determined that the future ex-spouse is eligible to receive 20% of the business, equivalent to a million dollars of the value of the business.

In the above scenario, the business owner may agree to pay to the ex his or her business interest over time. These payments may stem from the cash flow of the company, or the business could take out a loan to accomplish this. However, if the cash flow is immediately available, it may be possible to simply pay for the soon-to-be ex’s shares outright, thus enabling both parties to cut ties right away.

The goal of many businesspeople during divorce in Alabama is to part ways with their exes while ensuring that they maintain full control over their shares of their businesses. The bigger a company, the more that is at stake. An attorney in Alabama can help with navigating business ownership and making sure that the proper measures are taken to avoid an unnecessarily costly divorce.

Source:, “3 Ways to Protect Your Business from Divorce“, May 10, 2017

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