For business owners in Anoka County, divorce can mean more than the dissolution of their marriage. The future of their company could be at stake.
That is because, many times, an ownership stake in a business is a marital asset. This could be true whether you and your spouse built the business together, or if one of you has worked on the business while the other focused on keeping the house and raising the children. In Minnesota, both direct and indirect contributions to a business entitle a spouse to an equitable (or reasonable) share of the business.
What can we do with the business?
A bank account can be divided into two. Usually, you can’t do the same thing with a business. This leaves three possible options for settling what to do with your company in divorce:
- One spouse buys out the other spouse’s share and owns the business
- The spouses sell the business and split the proceeds equitably
- The exes continue to co-own the business after their marriage ends
Which option would work best for you depends on several factors. These include the size and value of the business, you and your ex’s ages, each of your respective interests in running the business, and your expected income and lifestyle after divorce. For example, if you are in your 40s, you will probably be more likely to want to continue owning the business than if you are in your 60s and close to retirement.
Other factors could come from outside of your marriage. For example, if you sell or dissolve the company, some or all of your employees could lose their jobs. A sale would also require you and your spouse to find a buyer who will pay a fair price.
Part of the decision process is to obtain an accurate business valuation. Once you know exactly what your share of the business is worth, you can make an informed decision. Business valuation is a complex process, usually conducted by an expert.
Your choice of divorce lawyer matters
This process is not simple, but it does not have to turn into a long, emotionally charged battle that winds up in court. When selecting a divorce attorney, choose one who knows what it takes to handle complex property division. Your lawyer should be able to give you honest advice and develop a solid strategy for achieving your goals regarding the fate of your business.