When going through a divorce, understanding what assets and property you are entitled to is vital. Often, many do not consider a business owned by their spouse when thinking about their marital property. However, the division of a company owned by one spouse is often one of the most highly contentious elements in divorces. If you’re wondering how your spouse’s business will be divided during the dissolution of your marriage, you’ll want to keep reading. You’ll also discover how New Jersey equitable distribution attorneys can help you navigate this complex matter.
How Are Businesses Valued During a Divorce?
In order to determine the value of a company, it will undergo a business valuation. This determines how much the business is worth and how much it could be worth to ensure that the value of each spouse is fairly represented during the dissolution of their marriage. It’s not uncommon for the spouse who owns the business to undervalue their business as a means of saving their business.
Generally, the income, assets, and market value will all be taken into consideration to determine how much a business is worth. You should also weigh the value of non-tangible assets, such as whether or not the company has any trademarks or patents, as these can also provide considerable worth to the company.
What Factors Influence I Will Receive a Share of My Spouse’s Business?
Before understanding what elements influence the distribution of a company during divorce, it’s vital to know how New Jersey divides marital property. The Garden State follows the equitable distribution method, meaning each spouse will receive a portion of assets relative to their contribution to the marriage. As such, it is not always a 50/50 split.
There are a number of factors that determine whether or not one spouse will receive a share of the other’s business. The most crucial factor to consider is whether or not the business is marital or separate property. Generally, so long as the company was created before marriage, it is separate property. However, you may still be entitled to the value of appreciation the company incurred.
However, there are instances where the owner of the business will co-mingle assets, meaning it can become marital property. For example, if your spouse had their business before you were married only to use funds from a joint bank account to pay for company expenses, it would then become a marital asset. Similarly, if the business is created or obtained after marriage, it is automatically a marital asset.
At Haber Silver Russoniello & Dunn, we understand that divorce is a complex process. However, when you factor in the division of a business, it can further complicate matters. As such, our legal team will do everything possible to help you through this process. Contact us today to learn more about how we can assist you.