What Happens to a Family Business in a Missouri Divorce?

If you and your spouse own a business together, or if one of you built a business during your marriage, you are probably wondering what happens to it if you get divorced. A family business can be one of the most valuable and most complicated assets to deal with in a divorce. The answer is not always simple, and it depends on several key factors under Missouri law.

Is the Business Marital Property?

The first question a Missouri court will ask is whether the business is marital property, separate property, or some combination of both. Under Missouri’s equitable distribution law, marital property generally includes all assets acquired by either spouse during the marriage. Separate property, on the other hand, includes assets one spouse owned before the marriage or received as an individual gift or inheritance.

So what does that mean for a business? If one spouse started the business before the marriage, the business itself may be classified as separate property. However, any increase in the business’s value that occurred during the marriage could be considered marital property, especially if the other spouse contributed to that growth. If both spouses built the business together during the marriage, the entire business is likely marital property and subject to division.

How Courts Divide a Business in a Missouri Divorce

Dividing a family business is rarely straightforward. Missouri courts do not simply split businesses down the middle. Instead, they look at what is fair given the circumstances of each case, weighing factors like each spouse’s economic situation, each person’s contributions to the business, and how the business fits into the overall marital estate.

When a business must be addressed in a divorce, there are typically a few ways courts and parties handle it:

• One spouse buys out the other. The business is valued, and the spouse keeping it pays the other their share, either directly or by offsetting other marital assets.
• The business is sold and the proceeds are divided. This is common when neither spouse can afford a buyout or when continued co-ownership is not practical.
• The spouses continue co-owning the business. This is rare but can work when the parties have an amicable relationship and the business genuinely needs both of them.
• A structured settlement is negotiated. Sometimes spouses agree to one person taking the business while the other receives more of other assets, like the family home or retirement accounts.

Before any of this can happen, the business must be properly valued. Business valuation in a divorce is often disputed, and each side may hire their own expert to assess the value of the company. The method used to calculate value, such as looking at income, assets, or the market, can significantly affect the outcome.

One thing worth knowing is that Missouri courts cannot force you to divide your business in any particular way. If you and your spouse can reach an agreement outside of court, through negotiation or mediation, you have much more control over the outcome.

Protecting Your Interests When a Business Is Involved

If you are going through a divorce and a family business is part of the picture, the stakes are high. The outcome can affect not just your finances but your livelihood and the livelihoods of your employees. Getting the right help early can make a real difference.

We understand how much is on the line when a business is caught in the middle of a divorce. Our Springfield divorce attorneys at Courtney & Mills are experienced in handling property division matters involving complex assets like family businesses. If you are facing this situation, we encourage you to reach out to Courtney & Mills today to discuss your case and learn more about your options.

Source:

revisor.mo.gov/main/OneSection.aspx?section=452.330