Divorces are complex, especially when they involve a business. In Minnesota, property division can be even more difficult if both spouses co-own the business.
Several factors make dividing business assets challenging.
Determining the business value
One of the first challenges is valuing the business. This process usually requires a professional appraiser. The valuation must consider various factors like the business’s earnings, assets, and liabilities. Disagreements on the business’s value can lead to lengthy legal disputes.
Dividing ownership fairly
Once the business’s value is determined, the next step is deciding how to divide it. Minnesota follows the principle of equitable distribution, meaning assets are divided fairly but not necessarily equally.
One spouse might receive a larger share of other marital assets to offset the business ownership. Alternatively, the couple may decide to sell the business and split the proceeds, or they could agree to continue co-owning the business post-divorce, which comes with its own set of challenges.
Managing business continuity
If one spouse continues to run the business, ensuring its smooth operation during the divorce is important. Divorces can create uncertainty, which may affect employees, clients, and business partners. It’s essential to minimize disruptions during the process to avoid long-term harm to the business.
Seeking professional legal guidance early in the process can help navigate the complex challenges that come with dividing business assets and maintaining business continuity throughout the divorce.
Moving Forward
Dividing a co-owned business during a divorce in Minnesota requires careful consideration of both legal and financial aspects. To protect the future of the business and ensure a fair outcome, couples need to approach these decisions with clarity and planning.