When you start or acquire a business during a marriage, Minnesota’s laws consider it marital property. This means there is an equal amount of shared ownership between you and your spouse. A divorce may result in changing your business’s ownership structure based on the law’s requirement to divide it fairly with a soon-to-be ex-spouse.
As noted by Business.com, your ex-spouse may become an unintended partner in your enterprise if you do not negotiate a mutually agreeable property division. You may find your ownership percentage reduced if a judge orders you to transfer some portion of shares or business units to your spouse.
Trading other marital assets for business ownership
The idea of having your ex-spouse as an owner or partner may not bode well with your existing business partners or associates. You may, however, have an option to trade your spouse’s share of the business for other marital assets. If your spouse wants to keep a shared residence, for example, you may trade it for 100% of your business.
Dividing the proceeds after a business sale
Some owners find that divorce changes their lifestyle plans. If you prefer to sell your enterprise, you may wish to consider obtaining a professional appraisal. Your financial statements and your product or service’s marketability may provide a good idea of an asking price. Selling a business during a divorce, however, generally requires dividing its proceeds fairly with your ex-spouse.
With some planning, you may buy out your spouse’s fair share of your business in a way that does not compromise its income and operation. Whether you decide to keep your enterprise or sell it, an appraisal can help you determine each spouse’s fair share. This may serve as a helpful first step in negotiating a favorable divorce settlement.
