Divorce is an emotional and potentially complex legal process. In all divorces that fall into the litigation process, the court must determine which property is part of a marital estate. However, if you or your spouse own a business, this matter may become even more complex. In certain cases, the business will be assessed for its value, or at least the share of the business owned by one party. This can be very difficult, but still, the courts must determine the value of a shared business or the share of one party in the business to achieve a fair and equitable property division. If you find yourself in this situation, you are most likely concerned and wish to learn more. This is why it is in your best interest to hire an experienced, compassionate attorney and to continue reading for answers to some of the questions you may have:
How do I know if my business is marital property or exempt property?
The following property is generally considered exempt from the equitable distribution process:
- Property acquired before the marriage
- Assets that were gifts
- Inherited assets are not marital property
- Assets designated as exempt in a written agreement, such as a prenuptial or postnuptial agreement
You must know that “equitable distribution” does not necessarily mean “equal,” rather, it means “fair,” in the eyes of the courts. This is why you must always hire an experienced attorney who knows the ins and outs of the divorce process and who will fight for your rights to your business.
How is my business valued?
To determine the value of your business, financial experts will examine records related to your business, and the court may even mandate an inquiry into your business practices and expenses. The court may require additional financial documents, which come with a risk to business owners sensitive to the circulation of confidential information and the possibility of financial discrepancies being reported to the IRS.
How can I protect my business from the equitable distribution process?
If you and your spouse jointly own a business, you may draft a shareholder agreement, which will allow you to agree on terms in the event of a divorce. This agreement will determine how each party’s interest in the company is valued, assign ownership, and limit the transfer of ownership to another party. You and your spouse may also draft a prenuptial or postnuptial agreement, which also allows you to designate such terms if you get a divorce.
Contact our compassionate New Jersey firm
Matters of divorce and family law require the attention and skill of an experienced attorney who will fight for your future. If you need a divorce and family law attorney in Ocean County, New Jersey, contact the Law Office of Sarina Gianna, LLC today to schedule a consultation.