NJ Divorce and Business Ownership Attorneys
Divorce Attorneys for Business Owners
Helping you make plans for your business and financial future
When marital assets are divided during a divorce, many business owners are surprised to learn that the division of assets can include their business—even if the other party wasn’t involved in building or running it.
We understand that whether it’s a business you started yourself or one that was founded by your parents or grandparents, the business represents to you far more than just a financial sum.
If you’re going through a divorce and are worried about the future of your business or want to figure out what makes sense for you, contact us today. Our divorce attorneys can help business owners and guide you through the process of managing your business interests during a divorce.
How a Business Is Valued During a Divorce in New Jersey
New Jersey is an equitable distribution state. This means that during a divorce, marital assets—and debts—are divided fairly, which, to some litigants’ surprise, doesn’t always mean equally.
You can work with divorce attorneys for business owners to determine whether your business would be considered marital or separate property (see below for more details).
If your business is considered a marital asset, you may need to go through a valuation process to determine how much it’s worth and what portion of it is divisible during the divorce.
Due to the complex and sometimes fluid financial situations of many businesses, it may be difficult to determine exactly how much a business is worth to the penny—but the valuation has major implications for determining other financial matters during a divorce.
At Jacobs Berger, our lawyers take this step extremely seriously. During the business valuation process, it is often common to utilize experts to assist, including:
- Industry experts in your field of business
- Forensic accountants
- Certified Public Accountants (CPAs)
- Real estate experts, if the business owns property
- Financial analysts who can review business holdings
Marital property vs. separate property
Generally speaking, even if one party carries the financial burden and is the person running the business, the business will be eligible for division if it’s determined to be marital property.
The divorce attorneys for business owners at Jacobs Berger have extensive experience in helping clients who are business owners navigate the equitable distribution divorce process.
Common Ways for Dividing a Business in a Divorce
If your business is considered marital property, the valuation process (see above) can go a long way toward determining other financial factors of your divorce, including child support and alimony.
Dividing a business can be done in a variety of ways. Depending on the situation, the business may be able to be divided by:
- Equitably dividing shares of the business (in legal terms this means a fair percentage and not necessarily an equal split)
- Splitting the business into separate organizations, with both parties retaining ownership or an interest in the new departments
Some business owners may find that selling their business assets and equitably dividing the profits is the best option. For divorcing parties still on good terms, it may even be possible for both parties to retain ownership or an interest (equitable or titled) in the business.
The divorce attorneys at Jacobs Berger have decades of combined experience in working with clients to pursue various personalized, creative solutions to business division during divorce.
Should I Consult with a Family Law Attorney to Divide Business Assets?
When going through a divorce, we always recommend at least having an initial consultation with an attorney.
A knowledgeable divorce attorney whose clients are business owners has been through this process many times before and may be more aware of possible creative solutions available to you.
At Jacobs Berger, our family law attorneys take pride in finding solutions that fit our clients’ unique needs and situations.
Ways to Protect Your Business in a Divorce
If you aren’t interested in selling the business, you still have options.
You can keep the business or you can split the business into two separate entities so that each party owns an independent component of the business. Or, if you and the other party continue to get along well, you can both retain ownership.
NJ Business Ownership and Interest FAQs
If you acquired or started your business prior to marriage, then it may be separate property. If your business ownership didn’t commence until you were already married, then it’s most likely a marital asset.
That said, separately held business assets can become marital property even if one spouse held the asset individually before marriage. For example, if one party owns a business before marriage, but after marriage the other party quits their job to help with the business, then the business can be considered a marital asset.
The reason for this is that it may be possible to show that both parties took action that directly caused the business to increase in value.
Factual circumstances can change the argument for keeping a business as separate property or marital property, so it’s important to speak with an attorney to discuss the specifics of your situation relative to you and your business.
While having your business organized as an LLC can help protect you from liability in the context of your work and business processes, it doesn’t mean your business is exempt from an equitable distribution divorce.
If your business is determined to be marital property, then it would be subject to state laws of equitable distribution.
New Jersey is an equitable distribution state, which means assets and debts are divided fairly, though not necessarily equally.
If your business is considered a marital asset, then it would be subject to equitable distribution. This means that the other party may be entitled to a percentage of the business, but that isn’t guaranteed.
If you work with an experienced divorce attorney who understands divorce involving business owners, you can seek creative solutions that may allow you to maintain ownership interests in your business.
Work with Our Experienced New Jersey Divorce Attorneys
At Jacobs Berger, our experienced divorce attorneys understand that for many people, owned businesses represent years of hard work—beyond their dollars and cents value.