When you get married, the last thing you’d ever think about is a divorce. Unfortunately, divorces happen, and if you do not plan for one, you and your spouse may regret it in the long run. The litigation process is often the most emotionally and financially draining aspect of a divorce, which is why most couples seek to avoid it, if at all possible. However, if you and your spouse own a business together, a contested divorce may become even more complicated. If you are getting a divorce and believe your business is at stake, please read more to learn about the steps going forward:
What is the difference between marital and exempt property?
When you get a divorce, a court will determine whether your assets are marital property or exempt property. Generally, exempt property will not be included in the equitable distribution process. However, you should keep in mind that equitable does not always mean equal, rather, it simply means fair, in the court’s eyes. Some examples of properties that are generally exempt from equitable distribution are as follows:
- Property acquired before marriage
- Gifts
- Inherited estates
- Assets designated as exempt in a written agreement
How will my business be valued?
Generally, in a divorce with a business involved, financial experts will analyze your business records exhaustively, and sometimes, a court may even mandate an inquiry into your business practice and expenses to get a clear picture of how your business and marriage function financially. If you misrepresent your finances, intentionally or unintentionally, the court’s findings will be reported to the IRS who may then investigate you as a result.
Can I protect my business from my divorce?
Fortunately, there are some things you can do to protect your business in the event of a divorce. First, you and your spouse may draft a shareholder agreement, which can assign ownership, detail the value of each party’s interest in the company, and limit the transfer of ownership to another party. Additionally, if you are not yet married, you may draft a prenuptial agreement to address various marital issues, including what will happen with your business if you or your partner should get divorced or pass on unexpectedly. Lastly, even if you are already married, you may still draft a postnuptial agreement, which essentially functions the same as a prenuptial agreement, only it is drafted after you are already legally married.
Contact our experienced Bergen County firm
We know how intimidating the divorce process can be, which is why we work, day in and day out to help our clients have the smoothest transition possible.
The Partners at Townsend Tomaio & Newmark lead the firm practicing Family and Divorce Law exclusively. All Partners have been honored by their inclusion in the New Jersey Monthly Super Lawyers List for several years. They lead the boutique firm in handling custody, support, alimony, divorce, and domestic violence cases across Northern, New Jersey.
