It is understandable to feel concerned about one’s financial future when thinking about leaving a spouse. Most people understand that they will lose a portion of their marital assets and may also have to pay support. Business owners in particular know that there is a lot on the line. However, addressing these worries early on can give men and women in Minnesota the confidence they need to move forward with the best decision for themselves — divorce.
Responsible business owners often prioritize paying off debt. For many, this involves paying themselves less of the overall income for the business. The rest of the money they could have taken home is then redirected toward paying back creditors. This once responsible move may be problematic during divorce, as the court may decide to base support payments on the entire income of the business, not just what the owner takes home.
But no matter how responsible a business owner might try to be, it is easy to make decisions that are less than ideal, like mixing business and marital assets. This could be taking out a business loan and then using those funds to pay for marital expenses, such as a mortgage, car payment or more. Without proper documentation or a paper trail of how those funds were used, it is very possible that the loan will be considered the business owner’s separate property. This means that it will not be included in property division and he or she will be responsible for paying off the balance.
No one wants to come out of a divorce in a poor financial situation. This is why careful planning is a key component to reaching an agreeable divorce settlement that respects the needs of both parties. However, business owners in particular may want to take the time to learn more about Minnesota family law before moving forward with this process.