What Happens To The Family Business In A Pennsylvania Divorce?

Going through a divorce is undoubtedly a challenging and emotionally charged experience. When a family business is involved, the situation becomes even more complex. In the state of Pennsylvania, which follows an equitable distribution approach, marital assets are divided fairly between the spouses in the divorce settlement.

Marital Vs. Separate Property

The first crucial step in determining the fate of a family business in a divorce is identifying whether it is classified as marital or separate property. Marital property includes assets and debts acquired during the marriage, while separate property encompasses assets obtained before the marriage, inheritance, or gifts.

If the business was established before the marriage, and no marital funds were utilized to support its growth and maintenance, it is likely to be considered separate property. In such cases, the court will not divide it as part of the settlement. However, if marital funds were used to sustain or enhance the business, it may be deemed partially marital property, subject to division.

Valuing The Business

Once it is determined that the business is indeed marital property, the next crucial step is to assess its value. This process often requires the expertise of a professional business appraiser. The appraiser takes into account various factors, including the company’s assets, liabilities, income, and future earning potential, to determine its overall value.

It is important to note that the value of the business does not directly translate into the amount of money to be split between the spouses; rather, it serves as a basis for the court’s determination of a fair and equitable distribution of assets.

Options For Division

There exist several avenues for dividing a family business in a Pennsylvania divorce settlement, each with its own implications.


One potential option is for one spouse to buy out the other spouse’s interest in the business. The amount of the buyout will depend on the valuation of the business and the percentage of ownership held by the departing spouse.

Sell The Business

Alternatively, the spouses may decide to sell the business and distribute the proceeds between them. This can be an attractive option when neither party wishes to continue operating the business and prefers a fresh start.


In certain cases, both spouses may agree to maintain joint ownership and continue running the business even after the divorce. This arrangement can present its own set of challenges, but it is viable when both parties are committed to making it work and possess a strong working relationship.


The resolution of a family business in a Pennsylvania divorce hinges on various factors, including the classification as marital or separate property, as well as the overall value of the business. If you find yourself going through a divorce involving a family business, it is crucial to seek the guidance of a knowledgeable attorney and a reputable business appraiser to protect your interests. While the process may be arduous, a fair and equitable distribution of assets can allow both parties to move forward and embark on the next chapter of their lives with confidence.

Scroll to Top