Why Spouses May Claim a Share of Your Business Even If They Never Worked in It

Executive Summary:

Dividing assets during a divorce can be complicated, especially when it comes to businesses. Many business owners assume that if their spouse never worked in the business, they have no claim, but that’s not always the case. In New York, the law can recognize a spouse’s right to a portion of a business, depending on marital contributions and how the business grew during the marriage. This blog breaks down why a spouse may claim business assets, how marital property rules affect business ownership in divorce, and what steps you can take to protect your business in New York.

How New York Classifies Assets During Divorce

Before we dive into why a spouse may claim business assets, it helps to understand how New York divides property during divorce. The state separates assets into two main categories, which play a big role in business ownership in divorce:

• Marital property: Assets gained or increased during the marriage, including income, real estate, financial accounts, and the growth of a business.
• Separate property: Assets you owned before the marriage or received individually, such as gifts or inheritances.

Here’s the catch: if your business increased in value during your marriage, the portion tied to that growth may be considered marital property. That’s why a spouse may claim business assets even if they never sent an email or closed a deal.

Marital Property in Business Cases: What You Need To Know

When it comes to business ownership in divorce, courts don’t just look at who worked in the business; they consider how the marriage contributed to its success. Business interests usually fall into three categories:

Premarital Business

If you owned the business before the marriage, the original value is usually separate property. However, if the business grew during the marriage, the increase may become marital property. That’s when a spouse may claim business assets related to that growth.

Business Created During the Marriage

Businesses started after marriage are generally considered marital property. Even if your spouse never worked in it, they may still have a claim because of contributions to the marriage, financial or otherwise.

Business Mixed with Marital Funds

If marital funds were invested in your company, the portion that benefited from those funds becomes marital property. A spouse may claim business assets linked to those contributions.

How Marriage Contributions Create a Claim to Your Business

A spouse may claim business assets because courts look beyond day-to-day work. Judges consider every contribution that supported the business, not only direct labor. 

Contribution can mean:

• Paying household bills so you could reinvest profits
• Being the primary parent so you had time to grow the company
• Supporting you through long hours and financial risk
• Allowing you to avoid hiring additional help during the early years

All these efforts can influence marital property. When the court evaluates business ownership in divorce, it often asks: “Did the marriage create stability that helped the business succeed?” If yes, a spouse may claim business assets connected to that growth.

How Courts Value Business Ownership in Divorce

Once the court decides that a spouse may claim business assets, the next step is valuation. Business ownership in divorce often involves forensic accountants, financial experts, and detailed record reviews.

Courts typically look at:

• The value of the business at the beginning of the marriage
• The current value at the time of divorce
• How much growth occurred during the marriage
• Whether marital property contributed to that growth
• How much of the increase is tied to the owner’s direct efforts

Valuation reports help determine the portion a spouse may claim business assets from. This process can become complex, especially if you own a professional practice, a partnership interest, real estate holdings, or a family-run company in Manhattan or Brooklyn.