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Who gets the business during a West Virginia divorce?

On Behalf of | Apr 21, 2022 | Divorce

The most complicated of all divorce cases in West Virginia are typically when a family business is involved. Even when only one spouse operates the business, the other spouse is entitled to an equitable portion of the profits and valuation of the entity. West Virginia is not a community property state, so it is rarely a 50-50 distribution situation. Additionally, sometimes there may be prenuptial contracts that will impact who actually gets the business when all is said and done. But, there are still certain factors that impact any settlement when the divorce is finalized.

Prior ownership

The awarding of a business generally is determined by what is worked out in mediation, but most businesses that were began by one spouse before the marriage will remain in their hands. Many divorce mediation processes result in a buyout of one or the other spouse, and most often the one who owns a business before the marriage will pay the other spouse in accordance with the amount of income the business generated during the length of the marriage and the increase in valuation during that time as well.

Options when a buyout is not feasible

There are also situations where a divorce settlement will not result in a buyout due to insolvency problems or a lack of funding. These cases often result in an ongoing profit percentage agreement of some type such as installment payments or an annual profit percentage agreement. This happens more often than many couples realize, and it can be a an excellent work around when the couple remains amiable after the divorce is final.

It is important to remember that all divorces are not messy, and that those with the cooler attitudes will usually prevail during the process. However, when selling the business is not what both parties want, an agreement can be reached to either maintain the operation with shared equity or reach a schedule that eventually pays one spouse off and they relinquish all claims to ownership.