Having a family-owned and operated business is often a source of pride for people. Knowing that their family built this business and that it serves the community is something worthwhile. However, if you are a business owner and you are facing divorce, your business could be at stake. Since Kentucky is an equitable distribution state, the court will look at your assets and divide them in an equal manner, which could include dividing the family business.
According to Mondaq, if you own and operate the business with your spouse, the court will look at it as marital property that belongs to both of you. It does not matter if your family started the business decades ago before your spouse was ever a part of the family. The court only looks at how the business operated during your marriage. It is likely that your spouse put in work to help the business, which means he or she has some equity in it.
Protecting your business is something you should plan out before your marriage. You can put agreements into place that will cover what happens if you should divorce. However, if you did not do that, you can still try to save the business through reaching an agreement with your spouse. You have the option to offer him or her other assets to make up for the loss of the business. You also could buy out your spouse so that you can retain full ownership of the business.
If you cannot come to an agreement, it is possible you could lose the business. The court could award it to your spouse or make you sell it and split the profits.