Asset Division During Divorce: Does My Spouse Get Half of My Business?
The latest data shows that in 2020 alone, there were about 630,000 divorces conducted across the US. Although this number shows a decrease in divorce rates from previous years, divorce is still necessary for many couples — and there’s no doubt that it can be a very stressful experience.
The distribution of assets, otherwise known as Equitable Distribution in New York, is one of the most difficult aspects of any divorce settlement. As such, there’s often confusion regarding the division of business assets, and many are left wondering, ‘is my spouse entitled to half my business?
Before venturing into equitable distribution, you must familiarize yourself with your legal rights and obligations.
Is The Business Marital Property
When a spouse is the owner of a business, the first thing you should do is determine whether New York will determine it to be marital property.
If the business was acquired during the marriage, it is regarded as marital property under New York law.
New York state implements “equitable division” in divorce settlements, meaning the court will determine what if anything your spouse is entitled to after the business is evaluated. However, equitable when it comes to a business does not mean “equal share.” That will depend on how much the spouse contributed to the growing value of the business, with either direct or indirect support.
How Can a Spouse Contribute to the Growing Value of the Business?
Contribution isn’t limited to employment status. Examples of spousal contribution include:
- Being employed or directly involved in the business
- Assuming the majority of household duties
- Serving as the primary caregiver for shared children
- Providing emotional and/or moral support
- Sacrificing personal goals and career growth to support the spouse.
The Business Is Not Marital Property
In some circumstances, the business is not considered marital property. These circumstances apply if:
- The business was inherited or gifted
- The business was acquired before the marriage took place
- The business was designated as a separate property with a prenuptial agreement
If any of the above is true, the business is regarded as a separate entity in the divorce and is not subject to equitable distribution.
Consult a Trusted Divorce Attorney
How to determine the value of a business is quite complicated and assigning a value to your spouses’ share is equally complicated. It largely depends on the circumstances in which the business was acquired and developed.
If you’re still wondering whether your spouse is entitled to half your business, it’s best to consult with professionals. For expert advice, you can always get in touch with our team at the Law Offices of Ian S. Mednick. We work with forensic accountants and business valuation experts to help you achieve the best possible outcome.
Contact us now to book a free consultation. We’ll be happy to answer any of your queries and guide you at every step of the legal process.