Dividing A Family Business After Divorce

How do you divide a family business in a divorce? It’s a common question among business owners and one that was important to one of our clients.

We represented the husband in a case in which the parties owned a successful family business operated as an LLC. During the marriage, our client signed an LLC agreement that stated he owned only 6% the business. The wife alone managed the LLC, leaving the husband in the dark regarding the value and operations of the business.

In the divorce, the wife argued that the husband was not entitled to receive more than 6% of the value of the business. The difference between 6% and 50% was substantial. Our firm came up with a legal theory to argue that the ownership percentage set forth in the LLC agreement did not control in the divorce. The theory was that the LLC was formed during marriage with community funds and on community credit, so it was community property and should be divided as such.

We hired an appraiser to value the business so we knew the fair market value.  We were then able to negotiate a settlement where the husband walked away with substantial cash for his fair share of the business. 

Molly B. Kenny
Founder and Principal Divorce Attorney

DISCLAIMER: The results are specific to the facts and legal circumstances of each of the clients' cases and should not be used to form an expectation that the same results could be obtained for other clients in similar matters without reference to the specific factual and legal circumstances of each client's case.

Molly B. Kenny's Bellevue family law office is conveniently located on Lake Bellevue Drive, making it easily accessible to those in the greater Seattle area. Our divorce and child custody lawyers help men and women get the information, guidance, and compassionate representation they need.
Law Offices of Molly B. Kenny