Protecting a Business from Divorce in New York
Brooklyn attorney prepares strategies to divorce-proof a business
If you’re the owner of a business that you have worked hard to build, you risk losing part of it in a divorce. In New York, a business that is started, acquired or expanded during a marriage can be considered marital property and so be subject to equitable distribution. The attorneys at Goldberg Sager & Associates in Brooklyn develop comprehensive strategies to help business owners protect their interests during property division.
Determining if a business is marital or separate property
In general, a business interest is separate property if acquired before marriage and marital property if acquired during marriage. However, even if the business ownership pre-existed the marriage, the appreciated value during the marriage can be considered marital property. Factors to be considered are whether the non-owning spouse helped with business operations or otherwise contributed to the business; whether marital funds were invested in the business; and whether business and personal assets were commingled. We’ll assess the facts of your situation to make a careful delineation.
What happens to a business in a New York divorce?
If a business is found to be marital property, the division may be handled in one of the following ways:
- One spouse can buy out the other spouse’s interest, or can negotiate to keep the business while the other spouse receives equal assets from another part of the marital estate.
- If neither spouse can buy the other out or does not want to, the court may order the business sold and profits divided.
- If both spouses want to keep the business, they can potentially run it as co-owners, either directly or by proxy.
Our attorneys are highly experienced at resolving property division involving business ownership, including in high-asset divorce cases.
Business structuring strategies that limit exposure
A business’s organizational structure and the existence of governing documents, such as buy-sell agreements, can affect how ownership is treated for purposes of equitable distribution. An agreement may include terms defining the rights of other owners and the disposition of shares if one owner get a divorce. We can advise you of ways to structure business ownership so as to best protect your interests.
Minimizing business valuation risks
A business must be accurately valued to be fairly divided in divorce. We can retain experienced experts including forensic accountants, business appraisers and tax professionals to make careful assessments. In cases of conflict over value, we’ll negotiate a fair settlement or take the case to litigation if necessary.
Effect of prenuptial and postnuptial agreements
Prenuptial agreements and postnuptial agreements can be effective tools for protecting business assets in a divorce. An agreement can define the business as your separate property or describe how a co-owned business should be divided. Our lawyers prepare valid marital agreements to safeguard businesses and can also defend your existing agreement if it is challenged.
