The court needs to determine if your family business is indeed marital property and how much of it can be divided between spouses.
Divorce is a delicate situation since two spouses’ common life must now be evaluated and divided, from family assets and debts to how much time each spouse gets to have with their own children. It is clear that divorce isn’t always plain and simple or developing as both sides would expect.
Law Property States Vs. Community Property States?
The way marital assets are treated during a divorce depends from state to state. There are two big distinct law approaches to this: law property and community property. Let’s start with the latter, as it is less common.
In common property states, all marital assets (which were acquired from the time of marriage until the divorce is declared) are considered community property, which means both spouses share the ownership equally. That means everything is divided in half, whether it’s the marital home, real estate, bank accounts, retirement funds, etc.
Missouri is a law property state, which means dividing the family assets is done by separating them into non-marital assets and marital assets, then splitting the marital assets into two parts in an equitable manner. Equitable doesn’t always mean 50-50, as we will detail further.
Dividing a Family Business during a Divorce in Missouri
First of all, the court needs to determine if your family business is indeed marital property and how much of it can be divided between spouses. If you started your business by yourself before getting married, one would think it’s your business, and it’s untouchable, but it depends on various circumstances.
For example, if your business grew during your marriage and your spouse was in any way involved in the company, that growth can be considered a marital asset. If the business started during your marriage, it would probably be considered marital property since it was probably funded with common funds.
Since a business is not so easy to just split and share, as it would be with liquidities, it may be tricky to settle how exactly you will divide it between yourself. An option would be for one spouse to give away other goods from their non-marital assets that would be equal in value to the business share the spouse would’ve received. That way, the business would not be affected.
Another option, much less desirable, though, would be to liquidate your business and easily split its value. But, ending a business is generally not the ideal option.
How to Get the Best Outcome for Your Business During Divorce?
The best way to protect your family business during divorce is to negotiate with your spouse and see if they are willing to leave the business to you and be compensated in other ways. If not, decide how to share the interests of your business.
If you think that your soon-to-be-ex-spouse will sabotage your business in any way or if you see any signs of retribution, discuss a plan with your St. Louis divorce lawyer and collect any evidence of bad intentioned actions from your spouse.
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