How a Business is Divided in a New York Divorce
Getting divorce is not easy. It can be complicated when, in addition to resolving issues of child custody, assets and property, some couples also have to consider the split of the business.
Dividing up a business comes with unique challenges. Furthermore, if both spouses have been heavily involved in the business, it may be harder to come to an agreeable arrangement. If you are having difficulty making any progress in negotiating the business split, consider consulting a divorce mediation attorney.
Having a business with your spouse can complicate the divorce process, however, the better understanding you have of the all of the issues to be addressed and considered, the easier the process will be.
The first step is to evaluate the business just as you would any other asset. Characterization and evaluation must be used to determine the value of the company. Characterization refers to determining what type of asset the business is. Valuation refers to what the business in worth in terms of money.
There Are Three Different Possibilities When It Comes to Dividing a Business
- The business would be awarded to one spouse and the other spouse would get the financial compensation. This is the most common form of dividing a business in a divorce. Furthermore, the spouse that has the greatest involvement with the business will usually be awarded the business.
- The business is sold and then the proceeds from the sale are divided between both spouses. This is not the most common scenario, however, it could be “cleaner” and less complicated when spouses cannot agree on who should get the business.
- Both spouses agree to keep the business open and continue running it together, regardless of divorce. This option can work where the parties can continue to work together in a business partnership even though they no longer will be married romantically together.
Get Professional Help and Make the Right Decision for Your Future
If you are not sure what decision to make, consult a business advisor or a New York divorce mediation attorney who can strategically guide you. There may also be tax implications to consider and other factors that you may not be aware of.
Contact Sabra Law Group for a confidential consultation about splitting your business in a divorce. Sabra has years of experience helping New York business owners deal with divorce and family law matters. You can schedule an appointment with Sabra at Sabra Law Group by dialing (646) 472-7971.