After years of hard work, you may worry about what will happen to your business when you get divorced.
If you and your spouse both own your company, here is what you need to know about how your divorce will impact this important asset.
How does New Jersey handle property division?
With some exceptions, any property that you or your spouse jointly own or acquire during the marriage is a marital asset. New Jersey courts will split these marital assets equitability, though not always equally. Courts will look at a number of factors when determining what is fair, including:
- Incomes and earning potential
- Length of the marriage
- Individual contributions to the relationship
- Standard of living during the marriage
- Custody arrangements
A company or practice that both spouses own is marital property and is subject to property division. Additionally, even if a business is a separate property, you or your spouse may have a claim on any increases in its value over the course of the marriage.
What are your options for dividing the business?
For a jointly-owned business, you have a few options for how to split it. Though uncommon, you and your spouse could continue to run the company together after the divorce. Another alternative is to sell to another party and split the proceeds. If you would like to continue running the business, you can purchase the other person’s share in the company.
Regardless of which option you choose, you will need to determine the value of the business first, which can be a complex and subjective process. Make sure to seek an independent valuation to ensure that the company is accurately assessed.