If you are a business owner and you are getting divorced, you may be worried about what will happen to your business. This is a common concern, and there are ways to protect your business. Read on to learn more.
Marital vs separate property:
To understand what will happen to your business, it is important to determine whether your business is considered marital property or separate property.
- Marital property: This refers to any property that is acquired over the course of the marriage.
- Separate property: This refers to property that was obtained before the marriage. It can also include gifts and inheritances. Additionally, it can include any property that is legally declared separate.
In New Jersey, most businesses are considered marital property.
How are assets divided in New Jersey?
In New Jersey, assets will be divided through the process of equitable distribution. This means that your assets may not be split 50/50, but rather in accordance with what is fair to each party. This will be determined by factors including:
- the length of the marriage
- the value of the property
- the age and health of each party
- each spouse’s contribution to the marital property
- the economic status of each party
- each spouse’s debts and liabilities
- the tax consequences that each party may face
How can I protect my business during a divorce?
The two main ways to protect your business include:
- A shareholder agreement
- This is a good option for couples who own the business together. You may draft a shareholder agreement with your spouse, which will assign ownership, detail how each party’s interest in the company is valued, and limit the transfer of ownership to another party.
- A prenuptial agreement
- If you are not yet married, you may want to consider creating a prenuptial agreement. This is a legal document that declares how your assets should be divided in the event that your marriage comes to an end. You can include your business in a prenuptial agreement. If you are already married, you can create a postnuptial agreement. This is the same document, created during the marriage, rather than before.
In many cases, both of these options should allow you to avoid the process of equitable distribution when it comes to your business.
If you are getting divorced with a business in New Jersey, our firm will advocate for you. Reach out today to discuss your case with a skilled and dedicated divorce attorney.
Contact Our New Jersey Firm
If you are getting a divorce or have any other questions regarding divorce-related matters, please do not hesitate to contact Paris P. Eliades Law Firm, LLC for a consultation today.
