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Call us at: (505) 881-2566
2727 San Pedro NE • Suite 114 • Albuquerque, NM 87110

FAQs – Divorce & The Family Business

When a couple owns a family business, the divorce has to deal with the breakup of both the family and the business.

How is the business taken into account in a divorce?

If a couple starts a business while married, then the business is community property, even if only one spouse actually worked in the business. It is valued like any other kind of community property (house, investments, retirement benefits, etc.), which means figuring out what the business is worth (assets minus debts the business owes).

People sitting in a group in an office

How is the business valued for divorce purposes?

Valuing the business usually requires hiring a CPA with expertise in divorce cases. In general, a business can be valued for different purposes, such as buying or selling it, probate cases, buying out a partner who retires or dies, or in a divorce situation. The bottom line number can be different depending on the reason why the business is being valued, and whether the business is being assessed as a “going concern” or in preparation for a sale. There are various methodologies used by the expert in coming up with the value. This is a complicated area of the law and requires an experienced CPA as well as a divorce lawyer. Business valuations are expensive. Depending on the size of the company, it can cost tens of thousands of dollars.

Who gets to keep the family business after we divorce?

The easiest and least expensive way to address this issue is for the spouses to agree on who will keep the business and to give the other spouse property of comparable value. However, if both spouses want to keep the business and force the other spouse out, then the judge has to decide which spouse is better able to continue to run the business in a way to maximize the benefit to the entire post-divorce family, i.e., generate the most income for child support and/or alimony, provide a legacy for the children, etc. If it isn’t clear that one spouse is better able to run the company than the other, the judge has the power to order the business sold and net proceeds allocated between the spouses. This is usually the least desirable outcome because now neither spouse has a job.

What happens if I can’t afford to buy out my ex’s share of the business?

If you want to keep the business, then you have to buy out your ex’s share of the business, either with cash or by giving up other property of similar value. Rarely is there enough cash to make a lump-sum payment, so you will be paying over time, with security or collateral provided to ensure your ex will eventually receive full payment. If that won’t work, then the business will likely be sold, if your ex insists on getting his / her share of the value of the business.

What if we both want to keep the business?

If you both want to keep the business and you agree to continue to run it together post-divorce, you can do this. The law does not require only one of you to keep it. A good operating agreement and buy-sell agreement will be essential to avoid future problems in how the business is run, what happens if one or both of you remarries, dies, or becomes disabled.

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I appreciate everything Mary Ann and her team have done for my children, and myself, which entailed so much. Everyone’s support was wonderful, and so needed, during such a brutal, emotional, and heartbreaking time.   M.F.
2017-03-31T16:04:38+00:00
I appreciate everything Mary Ann and her team have done for my children, and myself, which entailed so much. Everyone’s support was wonderful, and so needed, during such a brutal, emotional, and heartbreaking time.   M.F.

I just wanted to take a moment to thank you for your representation. I can’t tell you how confident and comfortable I felt having you represent me and the peace of mind that brought was worth more than I could...
2017-03-31T16:22:11+00:00
I just wanted to take a moment to thank you for your representation. I can’t tell you how confident and comfortable I felt having you represent me and the peace of mind that brought was worth more than I could have imagined.  I never once felt that you were working without my best interests in mind and contrary to my ex-husband’s experience, the expenses incurred were reasonable and fair, and I believe you were diligent about not incurring additional costs unless they were absolutely necessary.   A.N.

The day I walked into your office I did not believe that my life would take such a toil on my life, the fact and promise you made that you would never leave my side at any point even when...
2017-04-03T10:55:47+00:00
The day I walked into your office I did not believe that my life would take such a toil on my life, the fact and promise you made that you would never leave my side at any point even when I just couldn’t find the strength to open emails because it was so painful to read has defined a new beginning for me.  I am back in NM and I will never look back thinking that he got the best of me, because you kept your promise to me and because I am doing it; I am living life again!D.A. D.A.

Going through a divorce is an agonizing process, the emotional distress was overwhelming at times and the financial implications only exacerbated my anxiety. On top of that I had to hire a lawyer and hope that they would be professional,...
2017-04-03T10:56:15+00:00
Going through a divorce is an agonizing process, the emotional distress was overwhelming at times and the financial implications only exacerbated my anxiety. On top of that I had to hire a lawyer and hope that they would be professional, reliable and honest. I found that at NM Divorce & Custody and can’t express how fortunate I felt to have had Mary Ann Burmester’s representation in what I thought was going to be a quick divorce. Mary Ann is sharp, knowledgeable and honest. She gave me recommendations that I felt comfortable in taking and I never felt her representation didn’t have my best interests in mind. Mary Ann was an excellent advocate when my husband’s lawyer was requesting things from me that were completely unnecessary and had no purpose other than escalating expenses. She and her team were on top of things from day one, leaving me no doubt I’d made the right choice. I’d recommend them to absolutely anyone. A.B.

I want to give NM Custody & Divorce LLC a HUGE THANK YOU, for your professionalism, but most of all your patience and kindness. My experience with your firm was amazing start to finish, in such a difficult time in...
2017-04-03T10:56:42+00:00
I want to give NM Custody & Divorce LLC a HUGE THANK YOU, for your professionalism, but most of all your patience and kindness. My experience with your firm was amazing start to finish, in such a difficult time in my life, your team made me feel supported not just legally but with your concern. Ms. Burmester is an amazing women and attorney her and your firm have my highest recommendation!!   C.S.