What Happens To The Business During A Divorce?
Regardless of who the individual owner of the business is, marital assets and debts that are accrued as either in individual names or jointly during the marriage are deemed to be marital property in New Jersey. Based on New Jersey's equitable distribution laws, the divorcing spouses will divide the assets and share the debts. Typically, the spouse who claims to have started the business, put the most or all of the work into building it and claims to be the rightful owner of the business will retain a disproportionate share of the business once the divorce is finalized.
If there is a business typically both the value of the business, as well as the income generated by the business, are in dispute during a divorce. Business experts and accountants will help the court and attorneys come to a logical valuation of its worth. If the business began after the couple was already married, there will be a portion of the business shared with the spouse who had a limited involvement in the business or even no involvement whatsoever. This is because the spouse who was not directly involved in the business will be seen as assisting the spouse who was running the business by taking care of the household, raising the children and doing normal everyday tasks that would have been left to the business proprietor if he or she did not have a spouse to provide these services, the theory being that the non-involved spouse added to the value while not directly taking part in the business.
The business could be sold as an aftereffect of the divorce or the decision could be made to sell it independent of the divorce. When this happens and the value of the business can be determined reasonably, then the assets and money that can be accumulated through the business's sale will have to be divided fairly between the spouses and it does not matter which person claims to have had more to do with creating the value. It will have to be shared on some percentage basis.
Even after the divorce, there's the chance that the couple will remain linked through the business with tax liabilities that will be established contingent on the business's value. This will also require a calculation at the time of the divorce settlement.
Speak To A Qualified New Jersey Attorney
If you or a loved one own a business in Toms River, Brick or any other town in New Jersey and are in the process of getting a divorce, it's important to bear in mind that the business could be a substantial issue as part of the divorce case. Because of that, it's a wise decision to contact a qualified divorce attorney from the Law Firm of Villani & DeLuca, P.C. in Point Pleasant Beach, New Jersey to discuss your case.
Most people would prefer not to think about divorce while they're in the middle of a marriage that they believe is a happy one. When there is a business at stake, however, it is something that must be considered with steps taken to protect it and its value in the event that there is a divorce. Running a successful business is hard work and all of that hard work can be rendered meaningless if the value of the business is harmed or the ownership must be split because of a divorce. In some cases, a divorce will not allow the business to continue.