The Mistake of a Business Owner Regarding a Divorce

In Minnesota, all assets of the parties, including marital and non-marital assets are subject to division by the divorce court. Each party has to disclose all assets regardless if the asset is a marital asset or not. Marital assets are divided equitably in Minnesota, which generally means equally. Non-marital assets, meaning assets acquired prior to the marriage or via inheritance, bequest or gift are generally awarded to the person who claims the non-marital interest. However, any claim of a non-marital interest must be proven by the spouse making such a claim. Consider these types of assets:

You own a bank account in your sole name with funds that you have received from your father since age 18. Your spouse does not know of this bank account. Your position is that this asset is a non-marital asset that your spouse is not entitled to any of it. Even so, you must disclose the asset in the divorce proceeding.

During your marriage, you founded a 501(c)(3) organization and loaned the charity $10,000.00 from income you earned during your marriage, which has not been repaid. The 501(c)(3) organization is not an asset of yours since this type of organization do not have owners so you would not disclose any ownership as there is none. However, you do have to disclose the $10,000 loan that has not been repaid because it is an asset (an accounts receivable).

You own a single family home along with your sister that you purchased five years into the marriage with income you earned from the marriage. You must disclose this asset. Your interest is subject to division by the divorce court.

You own a single family home along with your sister that you purchased prior to your marriage and you used your inheritance to pay for the repairs, maintenance, taxes, etc. on the single family home. Your must disclose this asset. Your position is that this your non-marital asset, and most likely you will be awarded the asset. However, you still have to disclose it.

You own cryptocurrency, but have not disclosed it to your spouse who is against owning cryptocurrency. You must disclose it.

You have a 50% ownership of a business. You must disclose the ownership of the business.

Your grandparents purchased a whole life insurance policy for you when you were 1 years old that is worth $300,000.00. You must disclose it.

Spangler and de Stefano, PLLP assists business owners with understanding and implementing divorce decrees and legal separations as it related to the business.

The material contained herein is for informational purposes only, and is not intended to create or constitute an attorney-client relationship between Spangler and de Stefano, PLLP and the reader. The information contained herein is not offered as legal advice and should not be construed as legal advice.