When a marriage ends, dividing assets can be complicated – especially when a business is involved. Understanding how Mississippi courts split a business during divorce can help you navigate the situation better and protect your investments.
Classifying your business as marital or separate property
The first step in dividing a business is usually determining whether it’s marital or separate property. In general, any business you start while you are married falls under the marital property category. There are a few exceptions, though:
- Businesses obtained through inheritance or gifts
- Businesses founded using money from an inheritance
- Businesses protected under prenuptial agreements
Dividing assets equitably
Mississippi follows the principle of equitable distribution when dividing marital assets, including businesses. You and your spouse won’t get a 50-50 share. Instead, the court will divide your business based on various factors to ensure a fair split. These factors include:
- Length of your marriage
- Each spouse’s contribution to the business
- Your jobs and individual earning potential
Valuing your business
You need to get your business assessed or appraised for a fair split. This step usually requires professional assistance to ensure accurate valuation. You need to review all your financial documents, including tax returns and profit-loss statements.
Additionally, you need to consider the value of intangible business assets. Examples of these include proprietary technology, trademarks and client relationships.
Options for splitting your business
Once you know how much your business is worth, you can explore different options for dividing it. These include:
- Buyout: One spouse purchases the other’s share. While this often requires significant financial capital, it can allow you to retain full ownership.
- Co-ownership: Both parties continue to own and operate the business together. This can preserve the current business structure, but it requires a strong working relationship and a high level of post-divorce cooperation.
- Sell and split: If neither party wants to keep the business, you can sell it and divide the proceeds. This offers a straightforward solution but isn’t ideal if you want to keep the business.
Navigating a business division during divorce
Dividing a business during divorce in Mississippi isn’t just about splitting assets – it’s about retaining the fruits of your hard work and protecting your rights. Understanding the process and seeking professional legal guidance helps ensure this part of your divorce goes smoothly and fairly.
