Business Owner Divorce Lawyers: Representing Clients in New Jersey
Often, business owners see their enterprise as more than just a business; it’s something they either built from the ground up or has been passed down through their family for generations. That said, very often, when a business owner finds themselves in a divorce, they’re extremely concerned about that business’s future. Our Somerset divorce lawyers understand the complex nature of these divorce cases, and we are prepared to put our experience to work for you.
Is a Business Marital Property?
In many cases, businesses are, in fact, considered marital property. This means that they are subject to equitable distribution in a divorce. In some cases, this is true even if only one spouse is in charge of all business operations. This is because courts will weigh a variety of factors during equitable distribution, such as monetary and non-monetary support the other spouse provided over the course of their marriage.
Unique Considerations for Divorces Involving Businesses
Divorces involving businesses involve a wide range of intricacies, including the following:
- Business Valuation: Determining the accurate market value of a business is fundamental. This may require forensic accounting and expert evaluations to ensure fair distribution.
- Type of Business Structure: The impact of divorce on a business can vary significantly depending on whether it’s a sole proprietorship, partnership, LLC, or corporation. Each structure has different implications for division and control.
- Ownership vs. Operation: If one spouse owns the business but the other has been involved in day-to-day operations, this can complicate how the business is evaluated and divided.
- Future Earnings and Growth Potential: Estimating the future value of the business is essential, especially if one spouse expects to continue growing the business post-divorce.
- Buy-Out Arrangements: If one spouse wishes to retain the business, structuring a buy-out or compensation arrangement becomes critical.
- Impact on Employees and Management: The effects of a divorce might extend to employees and management, especially if ownership changes or if the business undergoes financial scrutiny.
- Legal Agreements Preceding Marriage: The presence of any prenuptial or postnuptial agreements concerning the business plays a crucial role in determining its fate during a divorce.
Protecting a Business from a Divorce
To protect your business from the financial and operational upheavals of a divorce, consider the following strategies:
- Prenuptial or Postnuptial Agreements: These can specify what happens to your business in the event of a divorce, helping to ensure that your business remains your separate property.
- Separate Property Status: Keep business assets separate from marital assets. Do not commingle funds from your business with your household accounts.
- Compensation Structure: Pay yourself a market-rate salary to argue that your spouse is compensated for business growth through your income, rather than having a claim on future business appreciation.
- Document Everything: Maintain clear and comprehensive records of all financial transactions involving your business and personal finances.
- Ownership Structure: Consider creating a trust or adjusting the ownership structure to include protective layers that can shield business assets.
- Buy-Sell Agreements: Implement a buy-sell agreement with any partners to restrict ownership transfers in the event of personal life changes, like divorce.
Contact Our Business Owner Divorce Lawyers Today
The bottom line is that whether you’re a business owner or the spouse of one, you mustn’t face a divorce without a competent team of lawyers in your corner. Contact the Law Offices of Kisha M. Hebbon, LLC today.
