Since businesses require a great amount of effort and work to start and continue, owners should consider ways to protect their business when entering into a marriage. Before marriage, couples can draft a prenuptial agreement. In this document, they can lay out the terms of their assets. The owner of the business can claim it as their own and not have to worry about losing ownership if divorce was to become a reality. These agreements can allow spouses to keep their property separate and prevent future arguments. If you are a business owner, this can be useful in protecting your business.
Once you are already married, you can decide to get a postnuptial agreement. For this agreement, you are outlining the same concepts as you would in a prenuptial agreement. The only difference is that this agreement is made after the marriage is made official through a wedding. You can list the business as your own to protect it as your possession.
Can my business be considered marital property?
If couples get divorced in the state of New Jersey, they face equitable distribution as a way to divide their assets. Equitable distribution means that the decision will be made to provide a fair and just division. It does not mean that the property will be divided equally among the two spouses. If the business happens to fall under the category of marital property, its value may factor into the allocation of the assets. The court will then have to come to a decision based on general guidelines. This can make your business in jeopardy since it will be out of your control. However, if the property was decided as separate property, it may not be subject to the same distribution.
What is a shareholders agreement?
When both spouses are joined in the business venture, there are still ways to protect the business from divorce litigation. As business partners, you can execute a shareholder agreement that will value each party’s interest in the company, detail ownership if a divorce were to occur and restrict the transfer of ownership. This can be a powerful tool to protect the business from any kind of disruption to the marriage. The court will not be involved in the process with a shareholder agreement in place.
Businesses can be especially difficult to lose hold of due to the amount of hard work that was put into them. In order to best protect your business, it is important to consider your options for your current situation. There are ways to protect your business before and after a marriage is legalized.
The Pollack Law Firm, P.C. understands that divorce and family law matters can be very complicated and emotional. They require strong legal representation from a compassionate attorney. Robert Pollack is an experienced divorce and family law attorney in Long Island, New York. Contact The Pollack Law Firm, P.C., to set up a free initial consultation.