If you are a business owner and you are getting divorced in New Jersey, you likely have a lot of questions. Read on to learn the answers to some of the most commonly asked questions about business owner divorces.
What is equitable distribution?
In New Jersey, assets are divided through the process of equitable distribution. This means that rather than a 50/50 split, your assets will be divided in a way that is fair to both parties. To determine what is fair and how assets should be divided, the court will examine your child custody agreement (if there is one), each spouse’s income, how each spouse contributed to the marriage, and more.
What is marital property?
Marital property will be subject to equitable distribution, whereas separate property will not. Marital property refers to any property that was acquired during the course of the marriage. Separate property is any property that was acquired before the marriage or legally kept separate. It is important to know that separate property can become marital property. For example, if you purchased a house before your marriage, but your spouse moves in and contributes to the mortgage payments and upkeep of the house, the home will become marital property. In New Jersey, a business is typically considered marital property unless stated otherwise in a legal document, such as a prenuptial agreement.
How is a business valuated?
In order to distribute your business, the court will first need to know its value. In most cases, experts will be brought in to analyze your business’ revenue, expenses, and more. To ensure that all documents are submitted accurately and completely, it is important to work with an experienced attorney. Attempting to undervalue or hide assets, either on purpose or by accident, can prompt an IRS investigation, leading to serious legal issues.
How can a prenuptial agreement protect my business?
One of the best ways to protect your business is with a prenuptial agreement. This is a document that declares how your and your spouse’s assets should be divided in the event of a divorce. For example, you can outline what should happen to your business in the event of a divorce, therefore avoiding the equitable distribution of your business. That being said, it is important that your prenuptial agreement is valid. If found invalid, you can lose far more of your assets than expected. Be sure to work with a skilled family law attorney.
If you have any questions or concerns about getting divorced with a business in New Jersey, reach out to our firm right away.
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