Establishing a business takes time and money and a lot of emotional investment. While it often becomes one’s biggest financial asset, it also symbolizes personal achievement. So- what happens in the case of a divorce?
It is a fact that when one spouse owns a business, things will be more complicated and the business affected when a couple decides to part ways. The extent to which a Minnesota business may be affected in case of a divorce will differ, depends on which precautions are in place. Precautionary measures can be taken before marriage or during marriage.
A pre-nuptial agreement is one way to protect one’s concerns before marriage and can help one keep a business in the case of a divorce. It is important to ensure that the pre-nup is valid. A prenuptial agreement is valid when no one was coerced into signing it, that the agreement was notarized and that it all assets have been disclosed by each member of the couple.
Business owners can also protect their assets by taking certain precautionary measures. These measures may include having an agreement in place indicating what happens to the ownership of the company in certain situations, or establishing a trust which may ensure that the shares of a business is excluded from marital assets. The biggest contributing factor is if the business is considered as marital property or not.
If a business is not considered as marital property, there should be no problem, but when it is seen as marital property, the court will calculate the accrued value which will have to be distributed. While it may be wise to take some precautions before and while married, it may also be a good idea to consult with an attorney once a spouse has filed for divorce and questions arise about the business. A Minnesota divorce lawyer is in the ideal position to assist with advice on how to protect the business interest of the owner.