As New York residents may know, some divorces are more complicated than others. Business owners may be faced with additional issues during the property division phase. Some might be mistakenly under the impression that the business is held apart from the divorce settlement, but in fact they are treated in many ways the same as other assets.
Courts will take into account if the business was started and maintained by only one of the parties before the couple wed. Circumstances might change if an ex-spouse was employed in the business in some capacity.
It may be a good idea to retain an attorney early on during a divorce. In order to split assets fairly, particularly if it includes a business, it might require mediation to reach an equitable agreement. Because businesses generate income and may provide support for an ex-spouse, it is unlikely that a judge might want to remove any assets from the business or force its sale. In addition, owners should be wary of firing their employed spouses, as this could lead to a wrongful termination lawsuit.
People who own a business and who are contemplating a divorce may want to speak with a family law attorney at the outset. As New York courts follow the principle of equitable distribution during the property division phase of divorce proceedings, judges will make their determinations on the basis of what they think is “fair”. In some cases, it may be better for the attorney to attempt to negotiate a property division settlement agreement that both parties can agree to, rather than to leave the decision entirely in the hands of a judge. Although the court will have to approve the agreement, it is more likely to do so when each party has been represented by separate legal counsel during the negotiations.