A divorce is already highly stressful and complicated, but it can be even more complex when one or both spouses have a business or business interests. A divorce attorney in Kansas City, MO, is useful when navigating the division of a business in mediation or advocating for your needs in court.

Determine If the Business Is Marital or Separate Property

Before you determine plans for protecting or dividing a business that you own or have an interest in, you need to determine whether it will be classified as separate or marital property. If the business is considered separate property, then your spouse will likely be unable to claim any of the business in property division.

However, even when a business is separate property, it does not mean that the business is irrelevant to property division. Missouri is an equitable distribution state, meaning that the court divides assets equitably based on several factors of the marriage, including the value of separate property. Even if your business is separate property, it still affects property division, as the court may consider it fair to give your spouse a greater portion of the marital assets.

The family court assumes that any property a couple obtained during the course of their marriage is marital property unless one spouse proves otherwise. Property gained during a marriage that are still separate assets include:

  1. The assets were an inheritance or gift that was given to one spouse.
  2. The property was obtained using separate assets.
  3. The property was explicitly excluded from marital assets through a prenuptial agreement.

When you have founded or invested in a business during a marriage, this ownership or interest is likely marital property. Simply investing or beginning a business prior to a marriage will not always make it separate property. The value gained throughout a marriage, a spouse’s financial and nonfinancial contributions, and other aspects may make a portion or all of the business marital property. The value of the business and/or its interest may need to be divided.

If you and your spouse co-own a business, it is considered marital property, and the entire business will have to be divided between both parties.

How to Divide Your Business and Protect It

The most effective way to protect your business during a divorce is to handle the division outside of court. The court will use equitable distribution laws, and you will not have a say in the final division of assets or the business. By negotiating or mediating the split outside of court, you and your spouse can work together to find a fair solution. This could include buying out your spouse with marital assets, paying your spouse a salary from the business’s profits, or selling the company and splitting the profits.

How to Preemptively Protect Your Business

Prior to getting married, or before beginning or investing in a business, there are steps you can take to protect your business in advance. This can keep your company and your interest in it safe from a potential divorce. The main options to preemptively protect a business are:

Keep Your Spouse Away From the Company

When you use separate funds for your company or investments, and your spouse has limited impact on how investment funds are managed or how the business is run, they will be owed a smaller percentage of the company in a divorce. While this may not preserve all your interest in the company, it can limit the financial damage. It may also be harder to argue that the business should be considered marital property.

Create a Marital Agreement

A prenuptial or postnuptial agreement is a stronger way to protect your company from the effects of a divorce. These marital agreements, made before or during a marriage, can dictate which assets are considered separate and which are considered marital.

If you begin a business during a marriage, a marital agreement could list how your spouse will be compensated for the business being considered a separate asset. If you enter into a marriage with a business, the marital agreement could cover how the business, its assets, and its increase in value are divided or treated in a divorce.

Marital agreements must be conscionable and legally valid to be enforceable in a divorce. If the agreement is unfair to one spouse and puts them in a bad financial position, the court will likely invalidate the contract. It can be helpful to work with a marital agreement attorney to create a fair and valid agreement.


Q: Is an LLC Marital Property in Missouri?

A: An LLC is more likely to be separate if the company is funded with separate assets and created prior to a marriage. However, this is not guaranteed to protect a business in a divorce. The increase in value could be considered marital property. If your spouse or marital assets made any significant contributions to the business, they are owed a greater percentage of the business. If you and your spouse co-own a business, or the business was created during the marriage, it may be considered marital property.

Q: Is Missouri a Community Property State?

A: No, Missouri is not a community property state. It is an equitable distribution state. If the court is responsible for the division of marital property in a divorce, it determines what is a fair and equitable split based on several factors. This includes the length of the marriage, the financial and nonfinancial contributions of each spouse, and the wasting of marital assets.

Q: What Is Considered Non-Marital Property in Missouri?

A: Non-marital, or separate property, in Missouri, includes any assets gained before the date of marriage and after the date of separation. Certain assets gained throughout the marriage, including gifts, inheritance, or assets that were acquired with separate funds, are also considered separate. In certain cases, separate assets can be purposefully or accidentally made into marital assets, such as through commingling or transmutation.

Q: How Do I Protect My Business From My Business Partner’s Divorce?

A: It is beneficial to address this problem before it happens and determine how a divorce will be handled in an operating, shareholder, or other business agreement. This may include buying back the ownership the business partner has or preventing a third party from gaining ownership. There are many options to protect a business if a partner is divorced, but it’s important to talk with a legal professional before the divorce happens.

Work With Stange Law Firm

An experienced attorney at Stange Law Firm can help you take the steps you need to protect your assets from divorce or negotiate an agreement with your spouse that is beneficial to you both. Contact our team today.