Should You Keep or Sell Your Joint Business in a Divorce?

Divorce is complicated enough, but when you and your soon-to-be ex also own a business, the stakes increase. One of the most significant decisions you'll have to make is whether to keep running the business together or sell it and go your separate ways. It's not an easy choice, and there are many things to consider before making the call. Let’s walk through the key factors, potential pitfalls, and how long you should expect this decision-making process to take.
Before diving into financials and legalities, ask yourself: Can we run this business together post-divorce?
Be honest.
For some ex-spouses, a business partnership works just fine, especially if the split is amicable and both of you are equally committed to the company. Others find that continuing to work together is a recipe for disaster—leading to constant disagreements, resentment, or a toxic work environment.
If your business requires day-to-day collaboration and emotions are still raw, keeping the business might not be realistic. On the other hand, if your roles are more separate (e.g., one of you handles finances while the other focuses on operations), it could work—but only if trust and professionalism remain intact.
What's the Business Worth?
Getting a professional business valuation is crucial whether you decide to sell or not. This number gives you a clear picture of the company's worth and helps you make informed decisions.
A valuation considers:
Assets and liabilities
Revenue and profitability
Market conditions
Future growth potential
Knowing the value helps in two ways: If one spouse wants to keep the business, they’ll have a better idea of what kind of buyout might be fair. If both decide to sell, they can negotiate with potential buyers from a position of knowledge.
Do You Need the Income?
Divorce often comes with financial uncertainty, so consider whether keeping the business is the best option for financial stability. If the business is your primary source of income, selling it might leave you in a tough spot. On the flip side, if the business is struggling and you’re worried about long-term viability, cashing out now could be the smarter move.
Think about:
Will keeping the business provide enough income for both of you?
Can one of you afford to buy out the other?
Would selling free up financial resources for a fresh start?
What Are the Legal and Tax Implications?
Dividing a business in divorce isn’t as simple as splitting a bank account. Legal and tax issues can get complicated, so consulting a divorce attorney and a tax professional is necessary.
Key questions to discuss with professionals:
How will business ownership be divided under state divorce laws?
If one spouse buys out the other, what’s the best way to structure the deal?
What are the tax consequences of selling versus keeping the business?
Common Pitfalls to Avoid
Emotions can cloud business decisions even if you and your ex are on good terms. Here are a few pitfalls to watch for:
Dragging Out the Decision: The longer you delay, the more the business can suffer. If there’s no clear path forward, don’t let indecision hurt the company’s value.
Letting Emotions Drive the Choice: Don’t hold onto the business out of spite or sell too quickly just to be done with your ex. Stay strategic.
Underestimating Financial Realities: A buyout might sound simple, but do you really have the funds to make it work? Don’t put yourself in a financial bind for the sake of keeping control.
How Long Could This Decision Take?
There’s no one-size-fits-all timeline, but expect this to take several months, if not longer. Here’s a rough breakdown:
1-3 months: Get a business valuation and assess financials.
3-6 months: Negotiate terms if one spouse wants to buy the other out.
6-12 months: If selling, prepare the business for sale and find a buyer.
If both of you are committed to keeping the business together, expect a transition period during which you will redefine roles and establish boundaries.
The Right Choice is the One That Supports Your Future
Whether you keep or sell the business depends on your relationship, financial situation, and long-term goals. Take the time to weigh your options, consult the right professionals, and make a decision that will set you up for success—both personally and professionally.
Divorce is tough, but making the correct business decision now can help you confidently move forward.
____________________________________________________________________________________
©2025 SoulFINANCIAL LLC
This information is not intended to be, and should not be construed as, investment, legal or tax advice. You should consult with a qualified financial professional or attorney for advice specific to your situation. Past performance is not an indicator of future results.
Information and recommendations contained in SoulFINANCIAL's commentaries and writings are of a general nature and are provided solely for the use of SoulFINANCIAL, its clients and prospective clients. This content is not to be reproduced, copied or made available to others without the expressed written consent of SoulFINANCIAL.
These materials reflect the opinion of SoulFINANCIAL on the date of production and are subject to change at any time without notice. Due to various factors, including changing legal environment, market conditions, or tax laws, the content may no longer be reflective of current opinions or positions.
Any external third party links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by SoulFINANCIAL LLC of any of the products, services or opinions of the corporation or organization or individual. SoulFINANCIAL LLC bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. Contact the external site for answers to questions regarding its content.