If you are a business owner who is facing a divorce, continue reading to learn how your business will be valued, if your spouse can get a part of your business, and how to protect your business from a divorce.
Can my spouse get part of my business?
There are two categories that property will be broken into in a New Jersey divorce: marital property and separate property. Separate property refers to property that was acquired outside of or before the marriage while marital property refers to property that was acquired during the marriage. If your business was created prior to you being married, your business will likely become a marital property which is included in the equitable distribution process. However, it is important to note that even if your business was started before your marriage, it is possible for a business to become marital property over the course of your marriage. This is true even if your spouse was not directly involved in your business. This is reason alone for business owners to retain the services of an experienced divorce attorney.
How will my business be valued?
Based on your businesses’ expenses, revenue, and debts, financial experts will assess your business to get it a value. The court will then assess what portion of your business may go to your spouse. Throughout this process, it is important that you provide the courts will the entirety of your financial situation regarding your business. If you fail to do so and there are any inconsistencies, the court will likely report this to the IRS which can trigger further legal issues.
Can I protect my business from a divorce?
There are three legal documents you may consider drafting to protect your business depending on your circumstances. One of the preferred ways to protect your business is by drafting a prenuptial agreement that will outline what will happen to your business in the event of a divorce. If you are already married, you may want to look into drafting a postnuptial agreement that will serve the same purpose. If you and your spouse shared a business, you may want to protect your business with a shareholder agreement. This will allow you to assign ownership and detail how each party’s interest in the company is valued. This document will allow you to limit the transfer of ownership to another party.
Contact our experienced Bergen County firm
At Townsend, Tomaio & Newmark, our attorneys have extensive experience helping clients to understand and protect their legal rights before, during, and after the divorce process in towns across New Jersey and Bergen County, including Hackensack, Ridgewood, Paramus, Teaneck, and Fort Lee. To speak with our team of divorce lawyers today in a free and confidential consultation regarding your concerns about your divorce, please contact us online, or through our Hackensack, NJ office at (201) 397-1750.