Will Divorce Affect My Business?

Will Divorce Affect My Business?

Few things can further complicate the already extremely complex matter of divorce more than business ownership. Even if your business is a completely separate asset, which is a high legal bar, there is a lot more to the matter than you may realize. If you are heading into a divorce and you own a business, it’s time to consult with an experienced Minnesota property division attorney

The Division of Property

Anything that you, your spouse, or you and your spouse together come to own while you are married is considered marital property in the eyes of the law. The only exceptions are gifts and inheritances given to one spouse alone. This means that if you came to own your business while you were married, it is almost certainly marital property.

Factors that Guide the Division of Marital Property

In Minnesota, marital property must be divided in a manner that is just and equitable when a range of variables are factored in, including:

  • The length of the marriage
  • Each spouse’s age and overall health
  • Each spouse’s income
  • Each spouse’s overall employability
  • Each spouse’s contributions to the marital estate
  • The contributions either spouse made in terms of homemaking and caring for the children 

Separate Property

If you owned the business in question prior to marriage, keeping it strictly separate throughout your marriage is necessary in order to maintain its separate nature. It’s important to point out, however, that if the business increases in value while you are married, that increase is very likely a marital asset. Factors that can weaken the claim of your business’s separate nature include:

  • The commingling of your business and household finances
  • The use of marital funds to support or grow your business
  • The act of running your business without paying yourself a fair wage, which deprives your household of that income

Addressing Your Business in Divorce

The matter of your business will need to be addressed in your divorce – regardless of whether all or only part of it is considered marital. Generally, selling a business to resolve property division isn’t financially prudent. Alternatives include:

  • Allowing your spouse a larger share of other marital assets, such as the family home, to offset their ownership in the business
  • Obtaining a loan and buying out your spouse’s ownership outright
  • Buying out your spouse’s ownership over time

If you own a business and are facing divorce, your circumstances are unique to you, and you shouldn’t delay reaching out for a seasoned property division attorney’s guidance.

An Experienced Minnesota Property Division Attorney

If you own a business and are facing a divorce, there are complications specific to your case that make it that much more challenging. The formidable Minnesota property division attorneys at Atticus Family Law are well-positioned to harness their extensive experience and skill in pursuit of your case’s optimal outcome, so please don’t delay contacting us for more information about how we can help you today.

Posted On

April 25, 2023

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