The property division process that you’ll have to navigate in your divorce can be stressful. If you don’t aquire your fair share of the marital estate, then you can be at a significant disadvantage heading into the next chapter of your life. Fortunately, New York law requires equitable division of marital assets, meaning that those assets should be divided in a fair fashion. But that doesn’t mean that they have to be divided equally.
While equitable division can be challenging to address in your divorce, it can be even more complicated when you have a family business involved. Let’s take a closer look so that if you’re a business owner you know what you need to do to protect your interests.
Dealing with a family business during the property division process
To start, it’s worth noting that in divorce most businesses are considered marital property. This is because the spouses either started the business together, or, if one spouse brought the business into the marriage, both spouses made contributions to it. Here are some key considerations you need to make, then, if your business is going to be looped into the property division process:
- Valuation: You can’t start negotiating how to divide a family business until you know what it’s worth. Through a professional valuation, you can take your equipment, inventory, and expected market conditions and sales into account when assigning a value to your business. This will give you and your spouse an idea of where to start when figuring out how to divide the business.
- Alternative division options: You don’t have to split all of your marital assets in half to reach an equitable division. Instead, you can use other marital assets to secure the outcome you want as it pertains to the family business. For example, if your spouse really wants to keep the business, then you might be able to negotiate more in retirement assets or for the family home in exchange for your portion of the business.
- Contributions: Although the business in play may be considered a marital asset, it won’t necessarily be deemed evenly owned. For example, if you brought your business into the marriage but your spouse did very little to support it, and the majority of the business’s income was used for non-marital purposes, then you might be able to argue that your spouse is entitled to a smaller share of the business.
- Your priorities: Before sitting down for settlement negotiations or going into court to litigate your property division issues, you need a clear understanding of what you want out of the future. If you want to control your business as you see fit, then you need to find a way to retain the business. If you’re worried about managing it and keeping up with its expenses on your own, then you need to find a way out. Don’t make your decision based on what’s going to “get back” at your spouse. Really think through what’s in your best interests before deciding how to proceed with your case.
An ill prepared divorce can lead to bad outcomes
You’ve worked hard to establish, build, or support your family business. You deserve to walk away from your marriage with a share that reflects the hard work that you put into the family business. But to secure that outcome, you’ll need a sound legal strategy that is convincing to your spouse or the court. With that in mind, don’t delay developing your case.
