What to Know About Business Owner Divorce in New Jersey
If you are a business owner who is facing a divorce, protecting your business is likely of utmost importance. To learn more about business owner divorce in New Jersey, continue reading and reach out to The Law Offices of Katherine K. Wagner.
In divorce proceedings, courts will generally break property into two categories: marital property and separate property. There are three types of separate property: 1) property that was acquired prior to the marriage, 2) property acquired by inheritance, or 3) property acquired by a gift from a third party. To remain separate property, the three forms of separate property must remain in the owner's name and not be commingled with marital property, such as by putting the money in a joint bank account or paying down marital debts.
Marital property refers to the property that was acquired during the course of the marriage. If your business was started after you were married, it will likely be considered marital property, and therefore included in the equitable distribution process.
However, courts may consider your business marital property if you started it before your marriage and continued running it throughout your marriage even if your spouse was not involved with running the business. This is why it is so important to have strong legal counsel through the divorce process. Reach out to The Law Offices of Katherine K. Wagner to learn more about how we can assist you through your divorce proceedings as a business owner.
A business is valued by the use of an accountant or financial expert who specializes in business evaluations. The value of your business will be based on many factors, including, but not limited to, your business expenses, revenue, debts, and reputation (otherwise called “good will”). The accountant or financial expert may also determine the value of the business at the time of the marriage so that this amount can be deducted from the value at issue in the divorce.
The court will thereafter assess the value that will be owed to your spouse in equitable distribution.
It is important that you provide the accountant or financial expert with full and complete financial information about your business. If you do not and any irregularities are found, such as under-reporting of income or unreported cash receipts, the court may report any inconsistencies to the IRS. However, if your spouse is aware of the under-reporting or cash receipts, it is generally advisable that the parties mutually agree on the value of the business and settle the matter out of court or without the intervention of a judge. Both parties could be reported to the IRS and disastrous and expensive legal consequences could follow. If you own your own business, consider hiring Attorney Katherine K. Wagner who can assist you with this process.
Drafting a prenuptial agreement with your spouse before marriage is one of the preferred ways to protect or minimize the financial consequences to your business in the event of a divorce. If you and your spouse jointly own the business, you may consider drafting a shareholder agreement that would determine the manner of how the business would be treated in the event of a divorce.
Do not face complex divorce and family law matters alone. With over 25 years of experience, the Law Offices of Katherine K. Wagner is dedicated to providing you with the knowledge and skill your case deserves. We will fight to protect your rights, your financial security, and your children. Contact the Law Offices of Katherine K. Wagner today for a consultation.
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Katherine K. Wagner, Attorney At Law is located in Somerville, NJ and serves clients in and around Somerville, Raritan, Lyons, Bridgewater, Manville, Zarephath, Neshanic Station, Pluckemin, Whitehouse, Martinsville, Bound Brook, Belle Mead, South Bound Brook, Bedminster, Whitehouse Station, Three Bridges, Liberty Corner, Warren, Middlesex, Somerset, Stanton, Skillman, Blawenburg, Far Hills and Somerset County.
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