Hearing your spouse utter the word “divorce” can be overwhelming and stressful, even if you knew there were problems in your marriage. It can become increasingly problematic when you own a business. What will happen to your business during a divorce? Does your spouse receive half of the business assets? This article will describe how dividing business assets in a divorce works, as well as what your legal rights are in this situation.
One of the best ways to handle business assets and divorce is to review ownership. Do you co-own the business with your spouse? Are you the sole proprietor? The division of assets depends on the structure of ownership in related legal documents. If you co-own the business with your spouse, then you can expect they will receive a large portion of the enterprise in the divorce, unless you buy them out or provide them with a different asset of equal value. If you own the business outright, you might be in the clear.
Evaluate Any Prenuptial Agreements
Are there any prenuptial or postnuptial agreements in place? If so, they must be in writing to be valid. These legal documents, when drafted correctly, will override the equitable distribution laws in place in New York. Moreover, judges tend to accept these documents in family court. One of these documents can explicitly protect your business from divorce divisions by stating that the company remains in your ownership if you file for divorce.
How to Divide a Business in a Divorce
If there are no prenuptial or postnuptial agreements in place, dividing business assets in a divorce can be challenging. The best ways to divide business assets in a divorce include the following:
- Offer a buyout
- Sell the business
- Continue with co-ownership
Co-ownership might not be the best option for you and your spouse. However, some couples work better with each other running a business than they do as a married couple. If you are confident in your ability to work well with your spouse after going through a divorce, remaining co-owners can ease the situation and lessen complications.
Offering a buyout is the best option if selling is not on the table. Many couples going through a divorce as joint business owners will explore the buyout option. More often than not, the spouse who didn’t start the business will be the one who sells their contract. A buyout can provide the recipient with plenty of financial security to help them adjust to being in a one-income household again until they can find a comparable job.
Divorcing as a Business Owner? Contact an Attorney Today
If you are preparing for a divorce as a business owner, it is in your best interest to consult with an experienced divorce attorney as soon as possible. The expert team of attorneys at Brian D. Perskin & Associates P.C. can protect your business assets and procure an advantageous division with your former spouse. You worked tirelessly to build your business, now let an attorney work relentlessly to represent you. Call us today at 877-826-7257 to schedule a free consultation.