Property Division in North Dakota Divorce Cases
In North Dakota, the division of property in divorce cases is governed by the principles of equitable distribution. This means that the court will divide the marital property between the spouses in a manner that it deems fair and equitable, but not necessarily equal. The court considers a variety of factors in making this determination, including the duration of the marriage, the age and health of the parties, their earning abilities, and the conduct of the parties during the marriage (North Dakota Century Code § 14-05-24).
Separate vs. Marital Property
A key factor in property division is the distinction between separate property and marital property. Separate property typically includes assets that one spouse owned prior to the marriage, inheritances received by one spouse, and gifts given specifically to one spouse. Marital property, on the other hand, generally includes all assets that the spouses acquired during the marriage, regardless of whose name is on the title.
According to North Dakota Century Code § 14-07-08, “The separate property of the husband or wife is not liable for the debts of the other spouse but each is liable for their own debts contracted before or after marriage.” This suggests that separate property remains separate in a divorce and is not subject to division.
Family Business as Separate Property
If you started a business before your marriage, it may be considered your separate property. However, the issue can become complicated if the business increased in value during the marriage, or if both spouses contributed to its operation or growth. In such cases, the court may determine that the increase in value or the spouse’s contributions constitute marital property, which would be subject to division in the divorce.
Protecting Your Business in a Divorce
If you wish to keep your business intact in a divorce, there are several strategies you might consider. These include:
Prenuptial or Postnuptial Agreements
A prenuptial or postnuptial agreement can specify that the business remains the separate property of the spouse who started it, regardless of any increase in value or contributions from the other spouse.
Buyout
If the business is considered marital property, one spouse could buy out the other spouse’s interest in the business. This could be done with cash, other assets, or through a structured payment plan.
Co-ownership
In some cases, ex-spouses may choose to continue co-owning and operating the business together after the divorce.
Conclusion
The question of whether you can keep a business you started before marriage in a divorce is complex and depends on a variety of factors. It is strongly recommended that you consult with a knowledgeable family law attorney who can provide advice based on your specific circumstances and the applicable laws in North Dakota.