Family-owned businesses are part of the American way of life, including here in Minnesota. Unfortunately, so is divorce. According to a professor of entrepreneurship at North Dakota State University, nearly 65 percent of all U.S. businesses are family-owned, with approximately 30 percent co-owned by spouses. With so many buisness owned by married couples it is essential that all couples have a plan for handling the business after a divorce.
There are many ways to manage a family-owned business after a divorce in Minnesota. The difficulty, however, is navigating the legalities associated with complex asset division such as dividng business assets, real property and intricate financial holdings. Due to the complex legal and emotional nature of divorce, many family-owned businesses fold after a split. While some do choose to remain in business, it is more common for couples to either sell the business or for one spouse to buy out the other party's share.
How a couple decides to handle a business after divorce often depends on the condition of the couple's relationship at the time. In some cases, the relationship may be so damaged that the idea of working together may seem impossible. Sometimes when a couple divorces they just want to go their separate ways and not be reminded of the past. In such situation, selling the business or buying out the other spouse may be the best answer for both parties.
When a couple does decide to keep the business it is important to be aware of one another's emotions. Even if the divorce was amicable the fact remains that something serious occurred and the relationship has fundamentally changed. Respecting each other's boundaries is vital if a couple intends to make a go of it professionally. In any case, it may be worth drafting firm guidelines with an attorney and establishing a game plan for dissolution if things do not work out.
Source: Businessweek, "Divorced, but Still in Business Together," Karen E. Klein, Feb. 26, 2013
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