Divorcing is never easy as it is an emotionally overwhelming and stressful process. However, it can become even more challenging when determining whether your spouse is entitled to half of your business. With significant assets like a business, it is critical to retain an experienced Rockland County Property Distribution Attorney who can help you protect your hard-earned assets. Continue to follow along to learn whether your spouse is entitled to a share of your business.
Is my spouse entitled to a share of my business?
To understand whether your spouse is entitled to a share of your business, you must first determine whether it is considered separate or marital property. If the business was acquired outside of the marriage, it will be classified as separate property. Separate property is not subject to equitable distribution. Therefore, you will not receive a share of your former spouse’s business as it was obtained outside of the marriage. If the business was acquired during the marriage, the business will be classified as marital property and subject to equitable distribution. Since New York is an equitable distribution state any assets acquired during the marriage will be subject to a fair division between the divorcing couple. This means you are entitled to a share of your spouse’s business as it is a marital asset. It is imperative to note that your spouse can receive up to half of your business value in a divorce.
Moreover, if the business started before the marriage, your spouse could still be entitled to a share of your business depending on whether the business has increased in value during the marriage and whether your spouse has contributed to your business’s success. The business may have to undergo business valuation. This process estimates the financial value of the business. Once this has been determined the court will consider several factors to determine how the business will be divided between the divorcing couple:
- Length of marriage
- Future business earnings potential
- Liquidation Value
- Potential losses
After the court assesses the above-listed factors, they will determine whether your spouse should receive a share of your business. For the most part, the business is usually awarded to the spouse with majority shares.
If you’re considering divorce and have a business, you might be unsure of how to proceed as you’re concerned about your spouse claiming a portion of your business. If this is the case, you need a qualified attorney from The Law Office of Peter L. Jameson, PLLC on your side. With years of experience, you can trust our firm to protect your assets.