Staying in a marriage that isn’t working is hard on the whole family. But, if you’re the owner of a small business, choosing to divorce could have serious implications on the welfare of your business and personal finances.
Before entering divorce proceedings, it’s important to consider how to make agreements and negotiations that consider the best interests of your business.
How will my business be handled in court?
Like many states, Minnesota follows the legal theory of equitable distribution when it comes to dividing marital property. This means that all marital property will be divided in a way that is considered to be equal and fair to both parties.
Marital property is defined as any property that was acquired during the marriage. If your business was started before the marriage took place, it may not be considered a marital asset. However, income acquired from the business during the marriage may count as marital property.
How can I protect my business from a divorce?
If your business is a Limited Liability Company (LLC) or a corporation, it will be protected to a large degree from divorce proceedings, especially if you incorporated the company before you got married.
You may also want to consider putting your business into a living trust. This will help you to shield your assets for greater protection.
Will my business assets affect my alimony payment calculations?
No matter how well you shield your business from the division of asset procedure during a divorce, it will be likely that the income generated from the business will be used to calculate alimony payments. You should keep this in mind when you are considering how to divide assets for your own benefit.
If you are facing a divorce in Minnesota as a small business owner, it is important that you do not underestimate how divorce can impact your finances. Make sure that you conduct thorough research so that you know the law.