Divorce can be legally and financially complex, especially when it involves business assets. An experienced divorce lawyer is essential to protect your rights. A lawyer can help navigate the nuances of equitable distribution laws, assess the value of business assets, and address any prenuptial or postnuptial agreements that may impact the outcome.
Additionally, a lawyer provides critical guidance on negotiations, preventing costly mistakes and helping you reach an outcome that safeguards your financial future. Without legal representation, you risk losing assets or agreeing to unfavorable terms.
How Does New Jersey Divide Assets?
New Jersey is an equitable distribution state, meaning courts determine what is fair for both parties, which may not necessarily result in an equal split. This differs from community property states, where assets are divided equally because both spouses are seen as having an equal interest in shared property.
The court considers more than just dividing assets equally by monetary value in equitable distribution. Factors like each spouse’s role in the marriage, whether one spouse quit working to care for children, the length of the marriage, infidelity, health, and custody arrangements all come into play. For instance, a spouse who primarily managed household duties may be entitled to a larger portion of other marital assets, even if they weren’t directly involved in the business.
What Happens to a Business in a New Jersey Divorce?
One spouse may have been responsible for daily operations if a business is involved, but this does not mean they are automatically awarded full ownership. There are several ways to handle business assets during a divorce, and spouses can decide whether to:
- Sell the business and divide the proceeds.
- Have one spouse buy out the other’s interest.
- Continue to co-own and operate the business together.
The best option depends on the specific circumstances of the marriage, the business, and the financial needs of both parties.
How Is a Business Valued in Divorce?
When determining how to divide a business, its value must first be assessed. A qualified business assessor will determine the fair market value by examining several key factors:
- Tangible Property: This includes physical items like buildings, machinery, inventory, office equipment, and vehicles. Tangible property adds to the business’s overall value.
- Intangible Property: These are assets without physical substance but are valuable, such as trademarks, copyrights, patents, legal contracts, and the company’s reputation.
- Assets: A combination of tangible and intangible property assets are items of value that the company owns. Over time, these can increase or decrease in worth, affecting the business’s overall solvency.
- Liabilities: The debts owed by the business, such as loans, leases, and mortgages, are subtracted from the company’s assets to determine the business’s fair market value.
The Role of Prenuptial and Postnuptial Agreements
If a prenuptialor postnuptial agreement exists, it may play a crucial role in determining how a business is divided in a divorce. These agreements can specify how business assets will be distributed, protecting the business from being divided if a divorce occurs.
Without such agreements, the court will proceed with equitable distribution, considering each spouse’s contributions to the marriage and the business.
Who Gets What in a Business Divorce?
There is no one-size-fits-all answer to how business assets will be split. For instance, a couple may have divided responsibilities, with one spouse handling operations and the other managing office duties. In another scenario, one spouse may be an owner in name only, contributing to other areas of the marriage, like childcare or household management, while the other runs the day-to-day business operations.
In each case, the court will consider each spouse’s role in the business and marriage to ensure a fair distribution. This does not always mean splitting assets 50/50. For example, one spouse may be awarded the business while the other receives an equivalent amount in other assets. The outcome depends on the unique dynamics of the marriage and the business.
Let the Toms River Divorce Lawyers at Zeigler Law Group, LLC Help Protect Your Business
Navigating the division of business assets during divorce is complex. Protect your financial future by consulting with the experienced Toms River divorce lawyers at Zeigler Law Group, LLC. Contact us for a consultation at 732-361-4827 or via our online form. Located in Toms River, Red Bank, Princeton, and Mount Laurel, New Jersey, we serve clients in Ocean County, Monmouth County, Mercer County, and Burlington County.