The unfortunate fact of marriage is that most will end up in a divorce. Although going through a divorce is nothing to be ashamed of, the real issue arises when a high-value asset such as a business is involved.
Understandably, business owners in New Jersey may be a little apprehensive about giving any sort of control to their former spouse. Those worries are justified, as New Jersey is an equitable distribution state. Although that does not mean there is a 50/50 split, it is likely that some of your business will transfer to your former spouse.
Read on to learn more about how to handle this issue when it ultimately comes up during your divorce.
Determining marital property
As stated above, New Jersey is an equitable distribution state. This means that a judge will look into all assets and divide them depending on what they think is fair. However, that only applies to marital property. That is why it is so important to consult with your attorney and determine if your business is actually considered marital property.
The best way to know is to think about when the business began. If the business began after the marriage, it would be deemed marital property, but not if it started before. However, it must be said that a judge may deem a business marital property even if it started before the marriage. This applies if your spouse contributed to the business during the marriage, either through physical funds or through taking care of the family home while you were at work.
What are your options?
If your business is split during the divorce, you do have some options at your disposal. You may offer to pay the valued amount of your former spouse’s part of the business, thus gaining back control. If they do not want to take the offer, you may also offer to simply pay them a royalty fee, and you continue to be the head of the company.
Protecting your business before a marriage
Perhaps the best way to protect your business from being split during a divorce is to draft a prenuptial agreement. Although a prenup is not a full-proof plan to keeping your business, it can reduce some of the demands your spouse may make if you do eventually file for divorce.
Protecting your business just be one of the most important things to focus on during divorce. However, that may be almost impossible to accomplish if you do not have an attorney at your side. Thus, it is important to consult with an attorney as soon as you obtain knowledge of your divorce.