Gislason & Hunter Law Blog

An issue of great importance in Minnesota divorce cases is confidentiality.  Confidentiality is even more important for Minnesota business owners, farmers and professionals who have significant assets, net worth and income and do not want publicity or public knowledge of private matters.

It is important for lawyers to understand the heightened need for confidentiality when working on these cases and work diligently to secure a court order and agreement of opposing counsel to keep documents and data confidential, to ensure that accountants, valuation experts, appraisers, and others working on the case obtain only the data necessary to perform the assigned task and acknowledge that they will keep any information gathered confidential to the extent allowed by the Court.

Minnesota business divorce attorneys, farm divorce attorneys, and attorneys representing professionals (doctors, engineers, dentists, other lawyers, and other professionals) should request court permission to file sensitive information and agreements under seal and be creative in securing client confidentiality, even in light of public policy preferring to keep court files open to the public. 

A very important issue in any farm divorce or business divorce is calculation of income because the amount of child support or spousal maintenance a court might award is based, in part, on this figure. 

Calculation of a farmer’s or business owner’s income cannot be accomplished by merely looking at tax returns.  In Minnesota, income from self-employment or operation of a farm or business is defined as gross receipts minus cost of good sold minus ordinary and necessary expenses required for self-employment or business purposes.  Minn.Stat. § 518A.30.  Specifically excluded from ordinary and necessary expenses are amounts allowable by the Internal Revenue Service for the accelerated component of depreciation expenses, investment tax credits, or any other business expenses determined by the court to be inappropriate or excessive for determining gross income for purposes of calculating child support. The person seeking to deduct an expense, including depreciation, has the burden of proving, if challenged, that the expense is ordinary and necessary.  This requires a more detailed analysis than is required for a typical “W-2” employee.  In Minnesota, courts have explicitly recommended employing the use of financial experts in calculating the income of a farmer or business owner.