What Can You Do about a Family Business in a Divorce?
A divorce can change nearly everything about how you live—your relationship, your home, even what you do for a living. If you own a small business, that business may be subject to division along with the other property you own with your spouse. Learn more about what makes a business a marital asset, and what your options are as a small business owner going through a divorce.
Whether or not your small business will be considered marital property depends on a number of factors. If the business was formed prior to the marriage, and you used no marital funds or spousal support whatsoever in support of the business, then there is a chance the business may have remained separate property. However, for closely-held small businesses, it is typical for those businesses to become marital property along the course of a long marriage. If the business was formed during the marriage using marital assets or support from your spouse, the business will be considered property belonging to you and your spouse, and will be subject to equitable division.
If you do form a business during your marriage, consider creating a post-nuptial agreement. These contracts can determine which spouse is designated the owner of certain property in the event of a divorce, and can help you avoid long battles during a divorce over the value of the business or who should control it.
However, if you have already decided to divorce, it will be necessary to consider other options. Some spouses are able to continue running the family business as partners after a divorce. Doing so requires that you and your spouse be able to set aside personal differences for the benefit of the business, or find a neutral third party to act as a partner or intermediary who can go between you and your ex.
While you may be committed to keeping the business going after a divorce, a split may also be a good time to sell the business and move on. If you do decide to sell, be sure to secure the services of an experienced business valuation expert to ensure that you receive an accurate assessment of your company’s worth. Your attorney can help you show how your efforts were instrumental in increasing the value of the business, entitling you to a greater share of the value of the business.
If you are in need of ethical, knowledgeable, and dedicated legal assistance for your New Jersey family law matter, such as a divorce or custody dispute, contact Union family law attorney John B. D’Alessandro for a consultation on your case, at 908-964-0102.