Divorce can be complicated, especially for high-asset couples with significant financial holdings and large estates to divide. Family-owned businesses are among the many assets that can become complicated to divide. While the final goal in dividing a family-owned business is the same as any other asset, minimizing the financial impact and protecting the client's interests, the actual technical know-how is often much more complex.
While there is no replacement for an experienced Minnesota family law attorney with know-how in estate and tax law when dividing business assets there are a number of things that Minnesota couples can do to prepare themselves. The first thing, for example, is to revisit the company's bylaws. The bylaws specify the equity and responsibilities of shareholders in the business and they will also be used as the basis for a person's claim on the business.
When the divorce agreement is ultimately finalized, it should also include the rights and responsibilities of the parties after the divorce is finalized. This includes the specific terms pertaining to the division of the assets and liabilities, goodwill and the terms of the shareholder agreement. Ideally an agreement concerning the dissolution of the business in case of divorce will be prepared ahead of time. This can exponentially save time and money.
There are a myriad of ways to address family-owned businesses in a divorce. While some may choose to dissolve the company entirely, wishing to end the relationship completely, others may choose to continue the business just as it was. In other cases, one spouse may buy out the other spouse and run the business independently. In the end, there are an infinite number of ways to deal with a business; it just depends on the wishes of the couple.
Source: Business Today, "A Fair Share: We bring a few simple ways to dissolve the business partnership with your spouse," Pritam P Hans, April 8, 2013
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