As a business owner, you’ve likely put blood, sweat, and tears into establishing yourself as part of your industry and building up a loyal client base. However, when you and your spouse decide to file for divorce, you may worry that the hard work you’ve put in will be erased if your spouse receives a portion of the company during the divorce. As such, understanding what can happen to a business during a Long Island divorce is critical. The following blog explores what you should know about these matters, including the importance of working with a Long Island property division lawyer to help you fight for the best possible outcome for your unique circumstances.
How Is a Business Handled During a Divorce?
When you file for divorce as a business owner, it can seem like the future of your company is up in the air. However, it’s critical to understand that there are a number of outcomes, so familiarizing yourself with the different possibilities is critical.
First and foremost, it’s necessary to determine whether the company is separate or marital property. Generally, if you owned the business prior to your marriage, it will be considered separate property. As such, it will not be distributed during your divorce. However, if you started the company after you were married, you used marital assets to expand your company, or your spouse contributed significantly to the growth of your business, it could be deemed marital property and thus divided between you and your spouse according to New York’s equitable distribution method of dividing property.
In the event your business is subject to distribution, you may be able to purchase your spouse’s share of the company, offer them other assets of equal or greater value in exchange for their share, or, if you and your spouse are on amicable terms, continue to run the company as co-owners.
What Can I Do to Protect My Company?
In general, one of the most beneficial things you can do to protect your business can only be done prior to your divorce, and in most instances, prior to your marriage. Establishing a pre-nuptial agreement that clearly outlines what would happen to your business in the event you and your spouse file for divorce is generally one of the most important things you can do to protect your company. However, if you and your spouse are already married, you can create a post-nuptial agreement, which functions the same as a prenup, with the only difference being when it is established.
As you can see, going through a divorce when you own a business can be incredibly overwhelming. That is why it’s in your best interest to connect with an experienced divorce attorney with the Law Offices of Jay D. Raxenberg, P.C. Our firm will help you explore your options to fight for the best possible outcome for you and your circumstances. When you need help, contact us today to learn how we can help you.
