Will you lose your business in your divorce?

Divorce can complicate matters, especially when a business is involved. If you own a business in New York, understanding how the court handles it during a divorce can help you protect what you’ve built.

How does the state treat businesses in divorce?

New York courts consider businesses marital property if you started or grew them during the marriage. Even if you established the business before the marriage, any increase in value during the marriage may count as marital property subject to division.

Will you need to sell your business?

You may not need to sell your business. Courts aim for fair, not necessarily equal, division of assets. You can explore options like buying out your spouse’s share or trading other assets to keep your business. These solutions help you retain ownership without losing what you’ve worked hard to build.

How do courts determine a business’s value?

Courts rely on financial experts to determine a business’s value. These experts analyze revenue, profits, and market trends. The court then uses this valuation to calculate your spouse’s share, if any.

What factors influence the court’s decision?

The court reviews several factors, including how much each spouse contributed to the business, their financial needs, and their share of other marital assets. A spouse who played a significant role in the business’s success may receive a larger portion of its value.

How can you protect your business?

You can take steps to protect your business before a divorce. Prenuptial or postnuptial agreements can establish clear boundaries for business ownership. Keeping business and personal finances separate and maintaining detailed records can also strengthen your position during property division.

Owning a business during a divorce creates challenges, but knowing the rules allows you to prepare effectively. Taking proactive steps and exploring your options helps you safeguard your business and your future.