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Matrimonial and Family Law Blog

Monday, October 8, 2018

What Happens To A Business In a New York Divorce?

A business is considered an asset in a New York divorce proceeding. Unless you can prove that the business is not a marital asset, your business is subject to the equitable property division laws in New York. Equitable division refers to a division of property that is “fair” which may or may not be equal. Therefore, your spouse could receive a smaller or larger percentage of ownership in the business depending on the other factors in your case.

Because a business can complicate a property division case, it is important to retain the services of skilled New York divorce lawyers. Our New York equitable distribution lawyers have experience representing clients who own and operate businesses that were obtained during a marriage, inherited, or acquired before the marriage. We carefully weigh all options with our clients to determine the best course of action to take that provides the best protection of our clients’ best interests when dividing a business during a divorce proceeding.

Obtaining a Correct Value for the Business

The first step is to obtain a correct valuation of the business. The value of your business includes the assets of the business, but it also includes the customer base, reputation, brand name, employee loyalty, and other factors of goodwill. Because it can be difficult to value a business, both parties may want to obtain independent valuations from industry experts.

Property Division for a Business

If the business is subject to the property division, there are several ways that the parties may handle the division of this marital asset. Some parties may agree to continue operating the business as co-owners. This arrangement may work for some spouses; however, it can be very difficult to move on with your life when you see your ex-spouse each day at work.  If you and your spouse insist on co-ownership, you may want to consider using a neutral third party to manage the day-to-day operations so that you and your spouse do not need to interact on a daily basis.

Selling the business interest may be a better option in your case. You have two options for selling an interest in a business. The business can be sold to a third party and the proceeds of the sale split between you and your spouse according to your property settlement order. On the other hand, your spouse may wish to buy your interest, or you might want to purchase your spouse’s interest.

When selling an interest in a business, the proceeds can be very helpful for a spouse who is trying to establish a new home on a single income. Selling an interest in the business can also be a way to cut the final ties to your ex-spouse if you want a clean break and new start, free from the emotional and mental ties to your previous life before your divorce.

Get Expert Advice During Your Divorce

If you are contemplating a divorce, it is in your best interest to learn about your legal rights and explore your strategies as early as possible. Contact Gassman Baiamonte Gruner, P.C. to speak with a New York matrimonial law lawyer today to discuss the steps you need to take to protect your interests in a business during your divorce action.

 


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