Include a provision in a property settlement agreement establishing the number of shares of a S corporation to be transferred to either you or your spouse as part of the resolution of your divorce case. Establish a date by which the transfer must occur. In the alternative, if you do not reach a mutual agreement, this information is included in the divorce decree itself.
A major element of a typical divorce case is dividing assets between a husband and wife, according to the book, "The Complete Divorce Handbook: A Practical Guide." Property is divided either on the settlement agreement reached by you and your spouse or based upon the provisions of an order from the court. For example, you may agree or be ordered to transfer shares of an S corporation from one spouse to another.
Draft a transfer agreement. The document need not be complex. Include a basic statement that the established number of shares in the S corporation are to transfer to you or your spouse, pursuant to the terms of the divorce settlement agreement of decree.
Insert signature lines for both you and your spouse. Execute the agreement.
Issue revised stock certificates that set forth the shares transferred to you or your spouse pursuant to the transfer agreement and associated divorce court documents. You can obtain standard stock certificate forms from any office supply store.
Obtain appropriate signatures on the stock certificate. A typical stock certificate is signed by the president and secretary of the S corporation. Because a S corporation is a closely held business entity, you and your husband or another family member of close business associate likely hold these offices.
Tips & Warnings
- Divorce cases generally, and dealing with the transfer of ownership interests in a business specifically, represent complicated legal matters. Consider hiring an attorney to represent you in regard to these issues. The American Bar Association maintains resources to assist you in finding an experienced lawyer.
- "The Complete Divorce Handbook: A Practical Guide"; Brette McWhorter Sember; 2009
- "The Law of Corporations: In a Nutshell"; Robert W. Hamilton; 2000
- Photo Credit Pixland/Pixland/Getty Images
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