TL;DR Summary
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- Minnesota law mandates a fair division of marital assets, including family businesses, in a divorce.
- Optimal scenarios allow for continued joint ownership, keeping the business in the family.
- In contentious divorces, the business may need to be valued and divided, or one spouse may buy out the other’s share.
- Selling the business is a last resort, potentially impacting family legacy plans.
- Consulting with experienced divorce lawyers, like those at Johnson/Turner Legal, can offer clarity and direction during this complex process.
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Navigating Divorce with a Family Business in Minnesota
Divorcing in Minnesota with a family business adds complexity to an already challenging situation. Whether you’re pondering how the business will fare or if it can still be a family legacy, it’s essential to understand your options.
Understanding Minnesota Divorce Law and Family Business
Minnesota’s equitable distribution law requires a fair division of marital assets during a divorce. For family businesses, this doesn’t always mean a straight split. The court considers various factors to decide ownership and ensure the business’s continuity and profitability.
Collaborative Divorce: A Win-Win for the Family Business
Ideally, divorcing couples can maintain a professional relationship, allowing for joint ownership and operation of the business. This scenario keeps the business intact and preserves the opportunity to pass it on to your children, aligning with the less disruptive paths to divorce settlements.
Strategies for Handling Contentious Divorces
When cooperation seems impossible, determining whether the business is marital or separate property becomes crucial. If the business predates the marriage, the founding partner might retain it, possibly compensating the other for their share. Conversely, a business started during the marriage is likely marital property, necessitating a buy-out or agreed-upon division.
The Last Resort: Selling the Family Business
Selling the business emerges as an option when co-ownership post-divorce is not feasible or if an agreement on its value cannot be reached. Though it provides a clean asset division, selling might not be the best choice for those hoping to preserve the business for future generations. It’s a decision that can also prolong the divorce process due to the time needed to find a buyer and close the sale.
At Johnson/Turner, we specialize in navigating the intricacies of divorces involving family businesses. Our goal is to help you find the best possible outcome that protects your interests and preserves your legacy. Reach out today for a consultation and take the first step towards securing your future and that of your business.
