Successful business owners may find that their careers put pressure on their marriages. Even when those who run businesses can balance their professional ambitions with the needs of their family members, they may still end up divorcing due to other sources of marital conflict.
Obviously, business owners have a lot to consider when they divorce. They may need to negotiate a way for their spouse to transition away from a job at the company. They may need support balancing their difficult personal situation with the ongoing demands of the business. They also need to protect the company from the financial impact of divorce.
Frequently, business owners who have maintained a comfortable standard of living throughout their marriages try to be appropriately supportive of their spouses when they divorce. Divorcing business owners need to protect themselves from scenarios in which they may face unfair financial outcomes because of their business endeavors. They need to be proactive about avoiding a double dip during financial negotiations.
What constitutes a double dip?
Minnesota has an equitable distribution law for property division. Couples have to realistically evaluate their financial circumstances and determine a fair way to split their shared property. If they cannot reach an agreement, then a judge applies equitable distribution rules to the marital estate.
The business may be at least partially marital property. The spouses have to agree on a valuation for the business. They then integrate that value into property division decisions. If the non-owner spouse also requests alimony or spousal support, the situation could result in a double dip.
Essentially, the business owner could face two financial claims based on the same future income. If the business valuation model factors in future income, it would be unfair to consider that income a second time when making decisions about future financial support for a lower-earning spouse. The financial matters that divorcing business owners need to address are generally far more complex than those faced by individuals who divorce after retiring or in a direct-hire employment arrangement.
Business owners preparing for divorce typically need support evaluating their finances and developing a strategy that can help them protect their business throughout the divorce process. Securing guidance from those familiar with the complexities of business law and the unique needs of divorcing business owners can lead to a reasonable and fair outcome during divorce.
