Due to the amount of effort put into a business, owners want to make sure their business is protected. Before marriage, couples can draft and sign a prenuptial agreement. In this document, they can lay out the terms of their assets to prove ownership. The owner of the business can claim it as their property and avoid any worries about losing ownership if divorce was to become a reality. These agreements can allow spouses to keep their property separate and prevent future arguments. If you are a business owner, this can be useful to protect your business.
Can my business be considered marital property?
If couples get divorced in the state of New Jersey, they face equitable distribution as a way to divide their assets. Equitable distribution means that the decision will be made to provide a fair and just division. It does not mean that the property will be divided equally among the two spouses. If the business happens to fall under the category of marital property, its value may factor into the allocation of the assets. The court will then have to come to a decision based on general guidelines. This can make your business in jeopardy since it will be out of your control. However, if the property was decided as separate property, it may not be subject to the same distribution.
How can I protect my business if I’m already married?
Even if you are already married, you can still go through processes to protect your business. You can decide to draft a postnuptial agreement with your spouse. For this agreement, you are outlining the same concepts as you would in a prenuptial agreement. The only difference is that this agreement is made after the marriage is made official through a wedding. You can list the business as your own to protect it as your possession.
If both spouses are joined in the business venture, there are ways to protect the business from divorce litigation. As business partners, you can execute a shareholder agreement that will value each party’s interest in the company, detail ownership if a divorce were to occur and restrict the transfer of ownership. This can be a powerful tool to protect the business from any kind of disruption to the marriage. The court will not be involved in the process with a shareholder agreement in place.
Peter V. Mandi, Esq. is an experienced divorce and family law attorney located in Bohemia, New York. If you require strong and dedicated legal representation in Long Island, New York, contact Peter V. Mandi & Associates, Inc. today for a free consultation.