A divorce that involves a business can make an already stressful situation much more complicated. It’s important to find a qualified Columbia divorce attorney who can make a business divorce go more smoothly.

Marital and Separate Property in Divorces That Involve Businesses

It is important to first determine whether a business is marital or separate property. If a business’s assets and ownership are considered one spouse’s separate property, it will likely not be up for division. A spouse may instead have a claim on future earnings that they would have benefited from.

When a business is one spouse’s separate property, it will impact how marital property is divided because Missouri is an equitable distribution state. One factor that determines how the court splits assets is the value of each spouse’s separate assets.

A business founded before a marriage may not always be separate property. Contributions of a spouse, the use of marital assets, and other factors can still result in a business being marital property.

If the business’s assets are marital property, they must be split equitably between spouses. If a business was obtained or created during a marriage, it is usually marital property.

What Are the Options for the Division of a Business?

A business may not be considered separate property for several reasons, including:

  • Spouses may co-own it.
  • It may have been founded during the marriage.
  • Marital funds may have contributed to the business enough for it to be considered marital property.

Depending on the unique situation that you and your spouse are in, there are several ways a business may be split or managed during property division. These include:

  • Buy-Out: This occurs when one spouse buys out the other spouse by providing them with liquid assets or a greater portion of marital assets. These must be equal to the spouse’s share of and future earnings in the business.
  • Co-Ownership: When spouses co-own a business prior to their divorce, they could continue this co-ownership. Spouses may need to create a new ownership agreement to fit the change in circumstances. This is a good option for spouses who want to keep a business running and believe that they can work together to do so.
  • Selling: If neither spouse wants to maintain the business, selling the business and splitting the proceeds is a good option. If the business sells quickly, this can also be one of the fastest ways to divide the profits of a business.
  • Paycheck: When one spouse owns a business but the business is marital property, a common solution is to provide their spouse with a regular portion of the business’s profits. This is also beneficial if the business is separate property, but the other spouse is legally entitled to future profits.
  • Marital Agreement: If a couple has a prenuptial or postnuptial agreement that determines how a business or its assets are managed in the event of a divorce, this agreement is followed. The court will only strike down a marital agreement if it is unconscionable and unfair to one spouse.
  • Shareholder Agreement: Depending on how a business is set up, there may be shareholder agreements or other terms that list how the business should be handled when an owner gets a divorce.

If there is no shareholder or marital agreement that predetermines the split, spouses must reach an agreement together through a collaborative divorce or divorce mediation. If spouses can’t find an agreement, the division of the business will be up to the discretion of the court. It’s typically beneficial for a couple to determine a split of business assets outside of court.


Q: What Is a Wife Entitled to in a Missouri Divorce?

A: Each spouse, regardless of gender, is entitled to a fair and equitable share of marital assets in a Missouri divorce. The court determines what is equitable based on factors such as contributions to marital assets and the individual assets and income of each party. The split of marital assets may not be equal, although it could be. Marital property includes all assets and debts gained during a couple’s marriage, with certain exceptions.

Q: Is Missouri a 50-50 Divorce State?

A: No, Missouri is an equitable distribution state, not a 50-50 property division divorce state. Under equitable distribution laws, if spouses cannot reach an out-of-court division, the judge will divide property according to what they determine is fair and equitable.

The court assumes that spouses have an equal claim to marital assets, and they reevaluate that claim based on certain aspects of the marriage. The court may look at any marital misconduct that lowered the value of marital assets, along with each spouse’s financial and caretaking contributions to marital property.

Q: Is an LLC Marital Property in Missouri?

A: Whether an LLC or other business is considered separate or marital property depends on several unique factors, including:

  • Each spouse’s ownership in the business
  • When the business was founded
  • The contributions of marital assets to the business

A business is likely marital property and subject to property division in the following situations:

  • Spouses co-own the business together.
  • The business was founded during the couple’s marriage.
  • The non-owning spouse made monetary contributions to the business.
  • Marital assets were used to maintain or increase the value of the business.

These cases can become complicated, and it’s important that you discuss your situation with a qualified business property division attorney to understand if your business is marital property.

Q: What Are Considered Marital Assets in Missouri?

A: Marital assets in Missouri broadly include any assets and debts obtained from the date of a couple’s marriage to the date of separation. Separate assets, or assets and debts gained before the marriage, can become marital assets. This can be done through commingling, such as you and your spouse placing separate assets into a shared bank account. It can also be done through transmutation, which is the purposeful retitling of an asset to be owned by both you and your spouse.

Certain assets, such as assets given to one spouse as a gift or as an inheritance, are considered separate property, even if they were acquired during a marriage.

Protecting Your Business Interests Before Divorce

The most effective way to protect your business and your financial interests in a business is to proactively take action to shield them. Divorce can have damaging effects on businesses, and a marital agreement or other forms of pre-planning can help prevent those impacts.

A divorce is already an emotionally straining and stressful situation, and working to defend your business can make it even more complicated. Contact the experienced attorneys at Stange Law Firm to learn how we can protect your business interests.