A successful small business or professional practice may represent years of investment. A company can also be the main source of revenue for the person who started the company. When business owners and successful professionals start considering divorce, they naturally worry about the companies that they run.
Is a business potentially at risk of division during a divorce in New Jersey?
Business equity could be marital
Frequently, business leaders worry about needing to run their companies with their spouses after they divorce. The courts may not force people to share ownership of their companies. However, they may require that people consider the value of the business during the property division process.
Under equitable distribution rules, assets acquired during the marriage are typically subject to division when people divorce. Although a business owner may want to treat the company as separate property, the chances are good that they have invested marital income in the organization. A thorough financial review may be necessary to determine what the company is worth and how much company equity is at risk of division when spouses divorce.
Even in scenarios where only one spouse directly invested in the company or helped run the organization, the value of the business could play a role in the broader property division process. They may need to rescind their interest in other marital assets or take responsibility for more marital debt to account for the value of the business.
Business owners hoping to retain sole ownership of their organizations may need support as they prepare for divorce, and that’s okay. Learning more about property division rules can be helpful for those with critical assets in need of protection.
