Will I need to split my business in my divorce?
On behalf of Barli & Associates LLC posted in divorce on Friday, January 19, 2018.
You might think of your business as “your business,” and you may even refer to it as that. But if you’re married — even if you started your business before your marriage — that business could, whether you like it or not, be defined as “our business.”
Any business that was created after your marriage will be owned by your spouse, just as much as it’s owned by you. On that note, a business you started before you got married will partially belong to your spouse if the value of the business grew during your marriage. The profits and increased value of any business you own following the day you said “I do,” will be viewed as marital property in a New Jersey divorce, and therefore, they will be divisible during the asset division process associated with your divorce.
It can be difficult to determine the exact value of a business. If you’re the one who runs and manages the business, and if you hope to emerge from your divorce as the sole owner of your business, you may ultimately need to pay your soon-to-be ex his or her share of the value of the business. It will, therefore, be important to know the exact value of your business before arriving at the settlement amount that you will need to pay your ex.
Spouses often work with business valuation experts who can help them create an estimation of the business value for asset division purposes. They are also well-served to fully understand New Jersey asset division law as it applies to divorce proceedings. Armed with this knowledge, spouses will be better equipped to negotiate a settlement that honors the rights and obligations of all parties involved — while at the same time preserving the financial stability and profitability of the business at the center of the negotiations.
Source: Forbes, “How Divorcing Women Entrepreneurs Can Get What They Deserve,” Kerry Hannon, accessed Jan. 19, 2018