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A family business can make divorce much harder to sort out. The company may support the household, employ one or both spouses, or represent years of work and investment. Even if only one spouse officially owns the business, its value and income can still become part of the divorce.
New Jersey divorce cases involving a business often require a close look at when the company was created, how it grew, where its money came from, and what each spouse contributed during the marriage. At DeTorres & DeGeorge Family Law, we help clients sort through those financial questions and work toward a fair resolution.
Is the Family Business Marital Property in New Jersey?
New Jersey uses equitable distribution when dividing marital property. In general, property acquired during the marriage may be divided as part of the divorce, regardless of whose name appears on the title or ownership documents.
The details can make a significant difference. Money invested in the business, unpaid work performed by a spouse, changes in ownership, and the source of the company’s growth may all affect what happens during divorce.
How Is a Family Business Valued During Divorce?
A privately owned business does not come with an easy price tag. Unlike publicly traded stock, there usually is no market price that tells spouses what the company is worth.
A business valuation may examine revenue, debts, assets, cash flow, tax returns, equipment, contracts, compensation, and other financial records. Depending on the company, you may bring in a valuation professional or forensic accountant.
Access to information can also become an issue. One spouse may have handled the books, taxes, payroll, and banking for years while the other knows very little about the company’s finances. Your attorney can help identify records to review before the property division is settled.
Can One Spouse Keep the Business After Divorce?
Owning a business does not necessarily mean former spouses must continue running it together. It also does not mean the company has to be sold.
One spouse may keep the business and compensate the other spouse for their share of its value. Other marital property can sometimes be used to balance the division. A settlement might involve cash, investments, retirement assets, real estate, or payments made over time.
The right approach will depend heavily on the company and the couple’s finances. A business that depends on one spouse’s professional license or personal reputation may need to be handled differently from a company both spouses built and operated together.
Protect Your Financial Interests When a Business Is at Stake
Do not assume you have no claim to a business simply because your spouse owns it on paper. You also should not assume that a company is worth whatever your spouse says it is worth.
Business records can tell a much fuller story. Tax returns, financial statements, bank records, ownership agreements, payroll documents, loan paperwork, and other records may help establish how the company operated during the marriage and what it is worth today.
Before agreeing to a divorce settlement, you should know how the business fits into the larger financial picture. Once you finalize property division, correcting an unfair agreement can become much more difficult.
Work With DeTorres & DeGeorge Family Law to Navigate Family Law Cases
A divorce involving a family business can require more financial investigation than a typical divorce. Questions about ownership, value, income, and future control of the company should be addressed before you make decisions that could affect your finances for years.
DeTorres & DeGeorge Family Law represents people facing divorce and other family law cases throughout New Jersey. Our attorneys can review your business circumstances, help you obtain the financial information you need, and work with you toward a resolution that protects your interests. Contact DeTorres & DeGeorge Family Law at (908) 923-0150 or (973) 828-8079 to schedule a consultation.
