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Divorce With a Business

Hackensack Lawyer for Divorce With a Business

1198490_35169802Representing Bergen County clients facing divorce with a business

Divorce is a complicated process. There are countless variables that can impact the way a relationship is dissolved. An already emotional and complex problem can be compounded by the addition of owning a business. In some cases, one spouse owns the business while the other works separately. In other cases, they may work together to build and prosper from a business. Sometimes, one works at the business while the other takes care of the home. Whatever the case, a business will most likely be taken into consideration when distributing assets. Unless the business was agreed to be separate property, it will most likely fall under marital property. New Jersey is an equitable distribution state. This means that marital property will be split and allocated in a just and fair manner. This does not always mean an equal split. A business is no exception if it falls under the definition of marital property.  If you or your spouse own a business and believe that it will be a factor in the division of assets, contact Debra F. Schneider, Esq. Our firm will work to see that you are awarded a fair allocation.  

Marital property or separate property?

If you face a contested divorce over the division of assets, New Jersey courts have an obligation to decipher whether it will be considered marital or separate property. Marital property is any asset or debt acquired during the marriage or separate property brought into the marriage. Separate property is any asset or debt acquired before the marriage or agreed as separate property through written agreement. Furthermore, any inheritance or gifted assets acquired during the marriage is usually considered “separate” when a marriage ends. When evaluating a business, things can get complicated. If the business started as separate property and commingled assets blur the lines or if one spouse works to support the other’s vision of owning a business, the court may consider it marital property. If the business is considered marital property, it will go through the process of valuation similar to any asset deemed marital property. This means that the court will assign a monetary value.

Assigning value can affect a business

If the business is considered marital property, it will be assigned a value. Financial experts will investigate records and bookkeeping related to the business. A New Jersey judge may mandate an inquiry into the practices and expenses of the business in order to paint a clear picture of the value of the business. This becomes a complicated matter when a business is sensitive to the circulation of confidential information. Furthermore, if discrepancies are found, there is a high likelihood of them being reported to the Internal Revenue Service.

How can you protect your business?

When you are joining in a marriage that is complicated by the ownership of a business, you should always consider the future. A very common way of protecting a business from the prying eyes of the government is to have a prenuptial agreement that keeps a business as separate property. Though it is hard to consider a prenuptial agreement at the beginning of a marriage, it may be in everyone’s best interests. Another way to protect your business is to consider drafting a shareholder agreement that allows for a couple to agree to terms if the marriage does not work out. The shareholder agreement will detail the mechanism for valuing each spouse’s interest in the company, assign ownership if the marriage doesn’t work, and limit the transfer of ownership if things don’t work out.

Contact a Hackensack divorce attorney

Divorce is an already complicated and emotional process. When a business is involved, it becomes much more complex. If you are about to go through a divorce with a business involved, you should contact an attorney as soon as possible to protect your business and your interests. If you need effective representation for your legal matter, contact Debra F. Schneider, Esq.

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