Couples generally negotiate arrangements to divide their assets if they choose to divorce. There is an equitable distribution statute that applies to divorcing couples in Minnesota, which means that the outcome of property division should be fair and equitable.
Valuable assets worth more than most other property in the marital estate can be a source of contention. Spouses may argue over how to handle those high-ticket assets. A business or professional practice owned by one of the spouses could be worth more than any other resources that they share, for example. These are some of the ways that a small business may affect the property division process in Minnesota.
Its value can affect major decisions
For many people with a business, their primary concern will be preventing the liquidation or forced sale of the business in the divorce. They may also prioritize maintaining sole ownership so that they have a way to support themselves after the divorce. They will need to report the business and its current valuation to their spouse and the courts. The value of the company can play a major role in the process of negotiating a settlement for the division of other assets. For example, allowing one spouse to retain sole ownership of the business might necessitate earmarking tens of thousands of dollars in marital property for the other spouse.
Home equity and retirement savings are among the assets that are valuable enough to reasonably offset someone’s interest in a business. In some cases, where there aren’t other assets worth a comparable amount, a business owner may need to take out a loan to compensate their spouse or accept responsibility for far more of the marital debt to make the outcome of property division fair.
There are ways to control the outcome
If people go to Minnesota family court to divide their assets, then a judge will be the one who decides everything from whether they have to sell the business or not to how to account for its value when dividing other resources. Many Minnesota couples with concerns about particularly valuable assets will try to avoid divorce litigation by instead negotiating a settlement directly with one another.
An uncontested divorce filing is an opportunity for people to set their own terms for the division of their property and to protect specific assets, like the business that they started during the marriage, from unpredictable or unfavorable outcomes in court. For many people, establishing the value of the business and what portion of it will be treated as marital property are important steps to take early in the divorce preparation process, regardless of whether it’s possible to reach a successful resolution in an uncontested capacity or not.
