ESOPs and Divorce

So, you’re facing a divorce – something you never thought you’d have to deal with. It seems you’re spending more time in meetings with lawyers than you are sleeping these days. It’s all so complicated.  Trying to equally divide out community property and accumulated marital investments is incredibly difficult – especially when there is a privately-owned business involved comprising a large portion of the value of the community property.

What do you do when one spouse wants to remain at the helm of the business and the other wants to be cashed out of their share?  Sometimes there just isn’t enough liquid capital for an off-the-cuff buyout.  In that case, what’s the solution?

It can seem to be an unsolvable problem when the divorcing spouses cannot come to an equitable decision.  Selling half of the business usually is not an option, but at the same time, you can’t take blood from a stone.  You just don’t have the cash for a buyout that would allow a clean parting of the ways.

Is there a compromise that can work for both parties?

The answer, thankfully, is yes.

An Employee Stock Ownership Plan might be the perfect solution.  There are definite benefits to considering an ESOP in spousal asset division.  From a business perspective, choosing this option can provide significant bonuses for both parties.  It is a flexible answer to a challenging problem.

To find out more about how an ESOP can help you with dividing your marital business assets equitably, check out our blog at