Divorce is a challenging and emotional process, especially for business owners. The question on many minds is, “Will I lose my business in a divorce?” This concern is valid and pressing, as the outcome can significantly impact one’s financial future and livelihood. Read on to learn more about how businesses are typically treated in New Jersey divorces and how our seasoned Somerset divorce lawyers can help you. Here are some of the questions you may have:
New Jersey follows the principle of equitable distribution, which means that marital assets are divided fairly, though not necessarily equally, between spouses. But how does this principle apply to your business? The first step is to determine whether your business is considered a marital asset. Generally, if the business was started or significantly developed during the marriage, it is likely to be classified as a marital asset. On the other hand, if the business was established before the marriage and kept separate, it might be deemed separate property. However, things can get complicated if marital funds or joint efforts were invested in the business during the marriage.
The court will consider various factors to determine the fair distribution of business interests. These factors include the duration of the marriage, the contribution of each spouse to the business, the economic circumstances of each party, and the value of the business. Understanding these factors can help you prepare for potential outcomes and strategize effectively with your attorney.
Planning ahead is crucial. If you are contemplating marriage or are already married and own a business, consider creating a prenuptial or postnuptial agreement. These legal documents can specify how the business will be treated in the event of a divorce, providing clarity and protection. A well-drafted agreement can distinguish the business as separate property, thereby safeguarding it from being divided.
Another proactive measure is to keep clear and thorough records of your business finances. Separating personal and business expenses, maintaining proper documentation, and regularly valuing your business can be beneficial. This practice not only helps in running your business efficiently but also provides a clear financial picture during divorce proceedings.
In some cases, business owners might consider offering their spouse other marital assets in exchange for keeping the business intact. This negotiation can be an effective way to retain full ownership and control of the business while providing fair compensation to the other party.
If you and your spouse cannot reach an agreement on the division of the business, the court will intervene and make a decision based on equitable distribution principles. In such scenarios, the court might order the business to be sold, with proceeds divided between both parties. Alternatively, the court may award the business to one spouse and compensate the other with other assets or a monetary settlement.
It is essential to work with a skilled New Jersey divorce attorney who understands the complexities of business ownership and divorce. Your attorney can help you navigate negotiations, present a compelling case in court, and explore alternative dispute resolution methods such as mediation or collaborative divorce. These methods can be less adversarial and offer more control over the outcome.
If you have further questions or wish to speak with a knowledgeable attorney about your case, please don’t hesitate to contact the Law Offices of Kisha M. Hebbon, LLC today.
