Running a business in New Jersey is a challenging endeavor. From creating an idea or service, getting it off the ground, finding customers, keeping it afloat and improving it, it is a difficult process. Those who are successful are justified in taking pride in their work.
However, many businesses are vulnerable to obstacles that unexpectedly arise. This is often viewed as being directly related to the business operation, but personal changes can also do damage. One notable concern is what will happen to the business as part of a divorce.
Business owners—whether they have amassed significant assets or are simply earning a living—will need to know what can happen when property is divided in the divorce. Although children and support issues frequently vault to the top of the list as topics for dispute, property division is equally contentious, if not more. Knowing the law for property division and understanding how to deal with this type of case is key to being protected.
The business must be assessed and categorized as part of the divorce
In New Jersey, property is divided based on equitable distribution. Many might see this as meaning property will be split in half, but that is not the case. The court tries to achieve fairness and that might not mean equal. In addition, the property will need to be assessed to see if it is community property or separate property.
Community property is that which was accrued after the marriage. If there is a joint bank account, it will likely be community property. If the couple purchased a home, automobiles, artwork or a vacation property, that will generally be viewed as community property. Separate property was acquired before the marriage or was specifically for the individual. An inheritance would be a prime example.
These determinations will go a long way to deciding how a business will be split, if one gets to retain it, if the other has a right to part of it and if a buyout or other negotiation tactic is needed.
A person who started a business before the marriage and built it will likely want to retain it after the divorce. The other person might argue that they contributed to its increase in value and prominence by working there, providing advice, contributing financially or taking care of the home while the business owner was free to work. This can stoke confusion and dispute as to how the business will be handled in the case.
According to the law, there are many factors that are considered with property division. That includes how long the marriage lasted; the physical health and ages of the people involved; income, property and assets they had when they entered the marriage; the standard of living during the marriage; if they had a written agreement about property; income and earning capacity with their education and training factored in; if the parties contributed to the other’s education, training and ability to earn; how much each contributed to the acquisition of property; current value of the property; tax consequences; if there are children and how they will be impacted; debts and liabilities; the deferring of career objectives to help the other and more.
When a business is in the balance, it is essential to have professional representation
Not every New Jersey divorce is rife with discord. In some instances, the people can negotiate an amicable settlement with the business owner retaining what they think is theirs and the other person receiving compensation or property in trade. In others, the sides have their position and refuse to deviate from it.
People who own a business and are thinking about property division as they move forward with a divorce need to be shielded. It is imperative to contact professionals who are experienced in all areas of divorce and are well-versed in complicated property division involving businesses, personal property and other items. This can be a vital part of reaching an acceptable resolution.