de Beer & Associates, P.A.

free initial consultations | email Us

local: (651) 714-2378

Protecting a family business in a divorce

When married couples go through a divorce in Minnesota one of the obligations of the courts is to ensure that there is a proper and fair division of the couple's marital assets. While any given marital asset can be complicated to divide, some of the most complex assets to divide are family-owned business.

According to reports from the U.S. Small Business Administration, there are more than 20 million small and family-owned businesses in the U.S. Because of the wide-range of industries that encompass the world of small and family-owned business, how a business is divided in a divorce proceeding varies widely. In many cases, one spouse will retain the business while the other party receives half of the marital value.

While this may sound straightforward, establishing the value of a business as an asset can be difficult. How a business is valued depends on the unique nature of the business itself. For example, if a business sells a product through direct sales the value of the business may be based on inventory, while in other cases the value of a business may be much more difficult to quantify. This is especially true with a service business.

In the ideal situation the couple will have addressed the business and the business assets in a partnership or prenuptial agreement before a divorce ever occurs. If this is not the case, however, it is important to hire an outside professional that both parties trust to value the business in order to get the best result possible.

Source: Cleveland Jewish News, "In divorce, separation of business not easy," Andrew Zashin, Dec. 20, 2013

No Comments

Leave a comment
Comment Information