When married couples who co-own a business decides to divorce, their intertwined personal and financial lives could make the process of asset division complex and challenging.
In North Dakota, the division of property during a divorce follows the principle of equitable distribution. This means that the court aims to divide marital assets fairly and equitably, but not necessarily equally. If you started or grew your business while married, courts typically consider this a marital asset and subject it to division. However, the specifics of its division depend on various factors.
Timing of business establishment
If you started your business before the marriage, the court may consider it as separate property. However, any increase in the business’s value during the marriage is likely viewed as a marital asset, subject to equitable distribution.
Contribution of each spouse
The role each spouse plays in the business is significant. If both spouses were actively involved in running the business, the court would more likely consider it as a marital asset. Even if one spouse is not directly involved in the business operations, their contributions, such as managing the household or caring for children, may also constitute indirect contributions to the business.
Valuation of the business
Financial experts often determine the current worth of the business. They will consider factors such as assets, liabilities and future earning potential to establish the business’s value.
Seeking legal guidance
Remember, even if you are the one who started the business or were more involved in its operations, if the court views it as a marital asset, your spouse could receive a portion of its value. It is crucial to seek legal advice during this process to understand your rights and options better.
Family law matters can be complex, especially when it involves a family business. It is important to approach these situations with a clear understanding of the law and how it applies to your unique circumstances. Consulting with a legal professional could ensure the best possible outcome for your situation.