The main deciding factor as to whether your spouse is entitled to your business is whether the business can be considered joint or separate ownership. However, if you started the business after marriage, your spouse may be entitled to half of your spouse’s share of the property. It is quite difficult to register a business started in marriage as a separate property. If the business was started by the spouse before marriage, the divorce cannot affect it as long as it can remain under the separate ownership of the spouse who started the business. If your business was not used for the benefit of both parties during the marriage, it will most likely remain separate property and not be divided. However, it should be noted that in some cases, your spouse may still be entitled to a portion of it, even if your business started before your marriage. Even if the court recognizes the business as separate property, it can still assess whether your spouse is entitled to some parts of it. While your spouse may be entitled to the value of a portion of his share of the property, your spouse may not be entitled to own a share of the property. The fact that you have a business and are getting a divorce does not necessarily mean that your spouse is eligible for the business.
Was the Business a Marital or Separate Property?
Assessing their share of the property is key to weighing your options regarding the fair distribution of both spouses’ joint property in a divorce. Once you understand the true value of your business assets, you can work with your family lawyer to determine how those assets may be affected by your divorce. There are several variables to consider in these cases, which is why it is vital to consult with an experienced New York City divorce attorney who can carefully examine your assets and your business valuation to determine the best way to resolve the dispute with your spouse. If you are concerned that your spouse will take half of the business when the couple ends your marriage, please consult with our Ruben Stepanian, Esq., at Stepanian Law firm to discuss your options. To determine if your spouse can get half of the business if you file for divorce, it’s important to understand New York property division laws. Because your spouse may be claiming some of your business in a New York divorce, it’s important that you contact an experienced attorney as soon as you know your marriage is heading for divorce, especially if you and your spouse can’t reach an estate agreement separation. If you or your spouse are an entrepreneur and have questions about what happens to your business during the divorce process, call Stepanian Law Firm for a free consultation.
Did the Business grow during the Marriage?
Depending on how all the other assets of the spouses are distributed, among other factors, the court may divide the business interests between the divorced parties. For example, a business could have been owned by a spouse prior to marriage, and only that part of the business that gained value or to which the spouse added value would be considered marital property. If you and your spouse both acknowledge that you spent family assets on a business you owned before marriage, at least part of the business will be owned by the community. The commercial interest is considered a family asset, like any tangible asset, and your wife is allegedly entitled to a 50% percentage that appreciates the value of the interest. Your wife is likely entitled to half the value of your share in the business unless you acquired the share by inheritance or gift.
When does the business become a Marital Property?
If you keep a family-inherited business completely separate from the marriage, it is not considered community property. A business is jointly owned if you co-founded the business before marriage, or if the business was acquired or created during the marriage. In most cases, you will find that businesses started during the marriage are considered joint ownership. It is difficult to attribute a business to joint or sole ownership, especially if it was created by a married couple during their marriage. The spouse may have contributed time or other resources to the activity during the marriage, so at least some of the activity could be considered a marriage. For a business to be a personal asset, it must be owned and run by one of the partners in the marriage. In many New York divorce cases, partner-owned businesses are considered family property.
It’s important to evaluate the Business.
When you get a divorce and corporate assets are part of the picture, the division of marital assets becomes more complicated. Divorces, where one or both parties own a business, are likely to be quite complex, as family property laws in New York can grant nonprofit owners’ rights to some corporate assets. Ownership in a private enterprise is another type of business that can be owned by spouses and is subject to fair distribution. Individual owners and partners often own a significant portion of their business and must transfer half of these shares to their partner in the event of a divorce. The specific arrangements for dividing a company vary depending on the level of involvement of both parties in the divorce and the liquid nature of their assets. On the other hand, if the spouse had received the shares in the company prior to the split, the company could be considered joint ownership and would have been split in a divorce. If you want to protect your business from losses during a divorce, the valuation of this asset must match the other assets and liabilities that are shared between you and your spouse.