New Yorkers who own a business understand the litany of challenges that go along with it. This is true whether they started the business or inherited it as a family operation. Keeping it afloat, improving it and earning a living can be difficult, but it is also rewarding. As with any business, unexpected problems sometimes arise. One that can be severely damaging is if the business, its control and its ownership is called into question as part of a divorce proceeding. These cases are inevitably complex – especially if it is contentious – and it is imperative to be protected.
How a business may be impacted by a divorce
In a best-case scenario, the sides will be agreeable and negotiate a relatively amicable settlement of all issues – especially a business that both might say they have a claim to. Having a grasp on the law for property division is a good place to start when dealing with these challenges. New York is an equitable distribution state. Many might think that means property will be evenly divided. In truth, it means that property is divided fairly. That determination can hinge on myriad factors and play in a role in splitting a business.
The law states that property that was accrued during the marriage and before they parted ways will be deemed marital property. In a business context, that will generally not mean it will be shared if one owned it beforehand. If it was started after the marriage, then it could be subject to equitable distribution. Any improvements during the marriage and profits will also be considered marital property. That can also apply to expenditures related to the business. Many couples draft a premarital agreement to address concerns about the business. This could be important when the case is assessed.
Handling complicated property division with a business may require legal advice
Divorce disputes centered around a business can stem from how much each side contributed to the business and its success, whether it should be divided equally, if a stay-at-home spouse should be compensated for giving the spouse who ran the business freedom from worry about household issues and more. Property division is not simple with a business and it is useful to have legal guidance regardless of the perspective of the parties. Even if there is acrimony, there may be room to negotiate an amicable settlement to avoid an extended and costly court battle. If there is no common ground, it becomes even more vital to have legal protection. No matter the situation, consulting with experienced professionals is a beneficial step.