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Ways to protect your business during a Minnesota divorce

What you do is a big part of who you are. If you have spent much of your adult life building up your own business, you likely have a sense of pride related to that company. It could even be a cornerstone of your personal identity and the legacy you want to leave in the world.

Unfortunately, if you find yourself inching closer to a divorce, your Minnesota business could be in danger. The Minnesota family courts wand to divide up the assets and debts you've acquired in your marriage in a way that is fair to you and to your spouse, per the equitable distribution standard. While equitable may mean fair, it may seem like anything but, as the courts may divide anything acquired during the marriage with a few exceptions.

While you may have been the one out earning all of the money, your spouse may have taken care of your home or raised your children. That could mean that even though they didn't do anything to help directly with the business, the court still feels they have a partial interest in its ownership or at least in the value it represents. Thankfully, there are tactics that can help you protect your business during a Minnesota divorce.

Negotiate before filing for an uncontested divorce

No matter how lucrative your business may be, chances are very good that your spouse doesn't want to operate the business. They may simply want some of the potential future profits or ownership equity that the business represents.

If you leave everything in the hands of the courts, they may do a sloppy job of dividing up your business or the assets you have invested in it. You could wind up business partners or, worse, your ex could assume control of the company while you still work there.

Working with your spouse directly or through your attorneys, potentially in a mediation session, can help you find a way to split up your business that works for you and your ex. You may need to compromise on other issues, such as ownership of other assets. However, with aggressive negotiating and a focus on the big picture, you can likely work out terms with your spouse that will allow you to keep the business in a divorce.

Execute a postnuptial agreement when issues arise

Ideally, you would already have a prenuptial agreement on record that protects your ownership interest in the business. Still, if you started the business during your marriage, a prenuptial agreement wouldn't have known to cover that.

If you and your spouse currently have marital issues, a postnuptial agreement can help if you eventually file for divorce and create structure and protections now for your business. You can set terms that protect your interest in the company while also making things fair for your spouse. If you both know what to expect, that will make the end of your marriage an easier process.

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