What Happens to a Family Business in an Ohio Divorce?

If you or your spouse (or you and your spouse) own a business, understanding what will happen to the business will be a key aspect of the equitable distribution of property in your divorce. While the Ohio courts have provided some general guidance for what divorcing spouses can expect regarding family-owned businesses, attempting to deal with a family-owned business will often be one of the most complicated issues involved in a couple's divorce.

Key Questions for Resolving Business Ownership in a Divorce

The following are some of the key questions that will need to be answered in order to determine which spouse will be entitled to keep the family business. While no single answer will be determinative, these are all factors that can influence the court's decision (or the spouses' negotiations) with respect to business ownership after the divorce:

  • When was the business started? If one spouse started the business prior to the marriage, there is a greater chance that spouse will keep the business after the divorce. In this scenario, the business (or, at least the business as it existed prior to the marriage) would most likely be considered separate property. On the other hand, if the business was started duringthe marriage, then it will be classified as marital property subject to equitable distribution.
  • Did the business increase or decrease in value during the marriage? This is an important factor, especially if one spouse started (or acquired) the business prior to the marriage. While the spouse who brought the business into the marriage will be the most likely to keep the business in the divorce, the increase or decrease in value during the marriage can still factor into the equitable distribution.
  • Do both spouses want the business? As a practical matter, do both spouses want the business? If one spouse was not interested in becoming involved in the business during the marriage, in most cases it is safe to say that he or she will not want to run the marriage after the marriage, either. If the business constitutes marital property but only one spouse wants it, the spouse who wants it may be able to keep the business in exchange for giving up other assets.
  • Do the spouses have other assets that equal or exceed the value of the business? The prior statement assumes, of course, assumes that there are sufficient assets besides the business to effect an equitable distribution. If the business is the only significant marital asset (or the most valuable asset by far), it may not be possible to equitably apportion the business to a single spouse. This is a challenging scenario that requires careful consideration.
  • What to the business's records say about ownership? This is actually likely to be less of a factor than you might think. It certainly will not be determinative. Just like your home, your cars or any other assets, what the ownership documents say is less important than how Ohio law divides marital property.
  • Do the spouses have a prenuptial agreement? Finally, do you have a prenuptial agreement? If so, what does it say about the business? The Ohio courts will generally enforce prenuptial agreement provisions covering business ownership, and it is critical to understand how your prenup will affect your divorce.

Learn More: Videos on Protecting Your Business in a Divorce


For more information about protecting your business in a divorce, we encourage you to view these other videos by attorney Eric R. Laubacher:

  • How Will a Court Divide a Family Business
  • Protecting Your Business in Your Divorce

Schedule a Free Divorce Consultation at Laubacher & Co. Today

If you are preparing for a divorce that will involve a family business, we encourage you to contact us for a free, confidential consultation. To speak with an experienced divorce attorney at Laubacher & Co., call our Cleveland, OH law offices at 440-462-1882 or request an appointment online today.

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