The process of equitable division can be a difficult one during a Minnesota divorce.
Couples who have spent years or even decades accumulating assets are forced to divide up their earthly possessions. Bank accounts, retirement funds, stocks, bonds, real estate and many other items are split between husband and wife. Though most people expect the division of these assets, it can come as an unpleasant shock to some that businesses, both small and large, are also often subject to equitable division.
Minnesota Divorce: Is the company a marital asset?
Equitable division works by splitting the value of all assets jointly owned or acquired during the course of the marriage. Businesses can also fall into this category if they were created or saw growth during the course of the relationship. For example, if you started a business during your marriage, even if your spouse was never directly involved in that business, it can still be deemed a marital asset and your spouse may be entitled to some share of the value of that company.
On the other hand, even businesses that were started prior to marriage could be deemed a marital asset. How so? While the value of the business prior to marriage is seen as a separate asset for the spouse who started the company, the increase in value achieved during the course of the marriage can be treated as a joint asset.
How is the company valued?
Though this might seem simple, the reality is that valuing a business can become complicated when parties are not in complete agreement. The business owner might understandably think that he or she should solely determine the worth of the company, but the reality is that a neutral expert is usually hired to calculate the value. The impartial estimate will help speed up the process of division and reduce the chance of bickering between parties.
How do you divide the company?
One way to divide the company is to literally split it in half, handing over a 50 percent (or whatever figure has been arrived at) interest in the company to your spouse. This solution may not be ideal in many cases, as the business-owning spouse likely does not want the input and interference of another owner. The other spouse also may not want a continued interest in the company, preferring instead to cash out and leave the company in the hands of the other party.
Thankfully there are other ways of dividing an interest in a business. Couples are also able to calculate the value of the non-business-owning party’s interest in the business and then compensate him or her some other way. That might mean giving the spouse a larger share of the value of the home or bank accounts, allowing you to keep the entire business to yourself.
An experienced Minnesota family law attorney can help walk you through the difficult process of divorce, including offering advice on confusing financial issues such as alimony and helping negotiate emotional subjects like child custody arrangements. For more information on divorce in Minnesota, along with a variety of other topics, contact Joseph M. Flanders of Flanders Law Firm at (612) 424-0398.
See Our Related Blog Posts:
What’s The Difference Between A Contested And Uncontested Minnesota Divorce?
Advice For Dividing Retirement Funds During A Minnesota Divorce
I am in the early stages of divorce or not. I have married for 30 years. We have three grown children. We own our own home. We also own two businesses with no debt. They both were aquired during the marriage. Both are my husbands livelihood. I do the books. However, my name is legally on both of them. IF, I am in total agreement, and I wish to sign over these both to him in the event of a divorce, can I do this. To be honest, if I can walk away with half of our savings, and half of the value of the house, I am totally ok with that. I know I am entitled to half, but I don’t want half. The marriage has been failing for sometime. I Know what I will be giving up and I am ok with that. How simple can this be, if both of us are in agreement.
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