Minnesota residents who own a business and are getting a divorce should expect that the process of dividing their marital estate will be lengthy and complex. There are a number of issues that arise when one of the assets owned by an individual is a privately owned business. It will be necessary to determine exactly how much the business is worth, if the spouse who owns the business is being completely truthful about the business income and if the valuation of the business will be impacted by any support obligations.
The value of a business can be determined by the market, income or asset methods. The first step for all of these methods is a thorough evaluation of the financial statements for the business. However, the discovery stage of valuating a business should not end there, particularly if there are spouses who do not participate in the daily business operations.
Valuation professionals hired by both parties should have equal access to all of the financial records of the business. They should also have the opportunities to speak to management and examine the company's facilities. If discovery is not executed properly, important information can be missed by the valuation professionals, which can result in a value that is inaccurate.
For business interest that was obtained before the marriage, using only the appreciation that accumulated during the course of the marriage may the proper step. However, whether this can be done will depend on the circumstances of the case and the applicable laws of the state.
An attorney who practices divorce law may assist clients involved in a high asset divorce by ensuring the proper valuation of business assets and the fair division of those assets. The attorney may also work to protect the rights and interests of clients in negotiations for asset division terms.