Divorce and Business Ownership
Like a house or a car, in the event of a divorce, a business is viewed as an asset. Going through a divorce while owning a business can be a messy situation, but there are New York laws that are aimed to protect the business owner while also being fair to the spouse.
If you’re facing the situation of a divorce while also being a business owner, it’s beneficial to have a divorce lawyer who can explain your rights and protect your assets. Keep reading to learn more about what you can expect during a divorce as a business owner.
Marital vs. Separate Property
When a marriage is dissolved, the marital estate is divided. This includes any owned homes, bank accounts, cars, and other common assists. Business assets are distributed based on state law. In this instance, the court will determine if the business and business assets are marital property or separate property.
What determines if property is marital or separate? Separate property includes property that is:
• A gift
• Acquired prior to the marriage
Separate property also includes any property that is designated as separate in a prenuptial agreement or postnuptial agreement. Property that doesn’t fall into one of these four types of separate property is designated as part of the marital estate and will be divided as appropriate.
This means that any business assets acquired during the marriage will be divided and distributed. Any assets owned before the marriage are considered to be separate. Any business appreciation that occurs over the course of the marriage may be designated as marital property.
If the spouses co-own the business, the business and its assets are considered marital property. The same stands true if the business was started post marriage.
Community Property vs. Equitable Distribution
Divorce, as it pertains to business assets, is as clear as mud. There are other factors that come into play during divorce settlements. Business assets are also handled differently, dependent on whether the assets are in a community or equitable distribution state.
In community property states, almost all property gained during a marriage is considered to be joint property. Any property that was owned before the marriage is determined to be separate. States with community property laws allow marital assets to be split 50/50.
On the other hand, states with equitable distribution laws determine the division of the marital estate based on a “fair” division for each spouse. There are many factors that are considered to determine who gets what in an equitable distribution scenario, including the age of each spouse, the length of the marriage, and the future earning potential of each spouse.
Trust Us to Protect Your Rights
Navigating a divorce on your own can be a challenge and, when business ownership is thrown into the equation, the situation becomes even more complex. Divorce laws and related property laws are extremely nuanced. To ensure that your rights are protected during the divorce, it’s beneficial to hire a lawyer that specializes in marriage and divorce cases.
Our team at Joseph A. Ledwidge PC offers some of the top divorce lawyers in the state. If you’re looking for a divorce lawyer in Brooklyn, NY to protect your rights and your assets, we’re the firm for you.
Contact us today at 718-276-6656 for a free phone consultation. We look forward to working with you and ensuring your business assets are designated in a legal and fair way.
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