If you are a business owner who is facing a divorce, you may be worried about the impacts that may be made on your business throughout this legal process. To learn more about business owner divorce, continue reading and reach out to our experienced divorce attorney who will walk you through the steps of the legal process ahead with your best interests in mind.
Can my spouse get part of my business in a divorce?
Marital property and separate property are the two categories that property will be broken into in a New Jersey divorce. Separate property refers to the property that was acquired before or outside of the marriage. This may include gifts or inheritance. Marital property is property that was acquired during the marriage. Your business will likely become marital property if your business was created after you were married.
However, even if your business was started before your marriage, and even if your spouse was not directly involved in your business, it is possible for a business to become marital property over the course of your marriage. Martial property is included in the equitable distribution process.
How will my business be valued in a divorce in New Jersey?
Courts will hire financial experts to assess your business in order to give it a value based on the following factors:
- Your businesses’ expenses
- Your businesses’ revenue
- Your businesses’ debts
The court will then assess what portion of your business may go to your spouse. It is important that you provide the courts with the entirety of your financial situation throughout this process. If you fail to do so, the court will likely report any inconsistencies to the IRS. This can trigger a slew of potential legal issues.
To ensure your documents are submitted accurately and completely to avoid complications, many business owners who are facing a divorce will hire an experienced attorney.
How can I protect my business?
One of the ways to protect your business in a divorce is to draft a shareholder agreement that will allow you to assign ownership and detail how each party’s interest in the company is valued. A shareholder agreement will also allow you to limit the transfer of ownership to another party. An alternative to this is to draft a prenuptial agreement before the marriage which will outline what will happen to your business in the event of a divorce. However, if you are already married, a postnuptial agreement will serve the same purpose after you are married.
Contact our Firm
Ross and Calandrillo, LLC is a full-service divorce, family, and real estate law firm located in Mountainside, New Jersey. For strong legal representation in all of your divorce or family law matters, contact Ross and Calandrillo, LLC to schedule a consultation.
