Getting a divorce is challenging for just about every couple. But when you own a business, the process can be even more confusing and time-consuming. Your New Jersey divorce attorney can help guide you through the process so you can get the best settlement possible, but it’s still helpful if you make a few preparations as you approach your court date. Here are a few things you should do to minimize the impact that your divorce may have on your business.
Understand That Your Business May Be Marital Property
Believe it or not, your business may be considered marital property even if your spouse didn’t have anything to do with it. It all depends on when you started the business and whether you used joint funds to establish or support the company as it grew.
If the court determines that your business is marital property, you may need to divide a portion of the assets and share them with your spouse as part of the marital settlement. This means they may be entitled to a portion of the profits or be entitled to part ownership of the business. Your attorney will help you better understand what’s at risk and if your business is likely to be classified as marital property under New Jersey law.
Get Your Business Valuated Correctly
Business valuation determines how much your spouse could receive as part of the settlement if the court determines that your business is marital property. That’s why it’s important to get your business valued by an experienced professional. Partner with a licensed CPA and let them assess the value of your company.
The court will use the valuation to determine settlement amounts, and if the business is worth less than your spouse thought it was, you may be on the hook for a smaller payout.
Be Prepared to Divide Ownership
As we mentioned earlier, the court may determine that your spouse is entitled to a portion of the assets or value of your business. This could mean you’ll be legally required to either split ownership with them or buy out their court-appointed share of the company.
Keep this in mind as you start the divorce process. While your attorney will be able to represent your arguments as to why you should be able to keep more of the business, the decision is ultimately up to the court. Under New Jersey law, marital assets, including business assets, will be divided in a fair manner.
If your spouse was involved in the business, the court may award them a higher stake. However, if your spouse wasn’t involved in the business or the business isn’t considered marital property, they may receive a smaller share or none at all.
Consider Your Short and Long-Term Goals
As you think about distributing ownership of your business, it’s important to think about your long and short-term goals. For example, if your business is struggling or you’re not passionate about what you’re doing, you may be better off selling the business and dividing the proceeds of the sale. However, if you want the business to continue growing, you may need to buy out your spouse’s share of the business or make them a partner in your business if you’re on good terms.
Discuss your long-term and short-term goals with your New Jersey divorce attorney as you prepare for your hearing. This will ensure that you’re aligned on the best way to represent your interests.
Schedule a Consultation Today
If you’re worried about your divorce impacting your business, don’t try to figure out where you stand on your own. Instead, work with an experienced New Jersey divorce attorney and let them guide you through the process. Contact Carvajal Law today to schedule a free consultation.