For many business owners, owning/starting their own business is one of their greatest accomplishments. If you are getting divorced, you may be wondering what will come of your business. Read on to learn more about protecting your business during a New York divorce.
How are assets divided in New York?
In New York, a couple’s assets will be divided through the process of equitable distribution. This means your assets will be divided in a way that is fair, rather than equal. To determine this, the court will consider factors such as both spouses’ income, how both spouses contributed to the marriage, your child custody arrangement if children are involved, and more.
What is the difference between marital and separate property?
The big question is: Will your business be subject to equitable distribution during your divorce? The answer to this depends on whether the business is considered marital property or separate property.
Marital property is typically subject to equitable division, whereas separate property is not usually divided at all in a divorce. Separate property includes the following:
- Inherited assets
- Assets obtained prior to marriage
- Gifted assets
- Assets that are designated as separate in a written agreement
It is important to know that separate property can become marital property over the course of a marriage.
How can I ensure my business is protected during my divorce?
Luckily, there are numerous ways you can protect your business in the event of a divorce. For example, If the couple has previously agreed upon joint ownership of the business, a shareholder agreement can be put in place to assign value to each person’s interest in the company. In this case, if the parties decide to divorce, the shareholder agreement can make the process easier for both parties regarding the distribution of the assets. For those who owned their business before they married, a prenuptial agreement can help avoid the business valuation process completely. A prenuptial agreement can allow you to outline what should happen to your business in the event of a divorce and help keep your business as separate property.
In order to create a prenuptial agreement or a shareholder agreement, reach out to our firm today. We are here to advocate for you and walk you through the process every step of the way. The sooner you reach out, the sooner we can begin protecting your business and other valuable assets.
CONTACT OUR FIRM
If you need strong legal representation regarding matters of divorce, family law, and estate law, contact the Law Offices of Susan A. Kassel, P.C. to schedule a consultation today.