Undergoing a divorce is a time-consuming process that comes with many different questions. Most of these questions revolve around New York laws that determine how assets will be divided between you and your spouse. If you own a business, understanding how your divorce will affect that business is a necessity so that you can prepare your business partners for the future.
Determining if the business is marital property
When it comes to the topic of businesses and divorce, many people don’t realize that their business can be considered marital property. Depending on the laws in your state and the legal provisions you have in place, a lawyer may help you to determine whether your business is considered marital property. This is a critical part of the divorce process.
What if your business is considered marital property?
In the event that your business is considered marital property, your spouse is likely entitled to half of your ownership. They may receive half of your stocks, which could give them voting opportunities in your business operations. Alternatively, your former spouse may choose to sell their portion of the stocks, and this could result in unnecessary drops in your stock prices.
If your business is considered marital property in your divorce, you do have options. You may offer your former spouse another asset of equal value in exchange for not taking a share of the business. For example, say you’re awarded one of the family vehicles. If half of your business shares are close to the value of the car you were awarded, you may offer your former spouse ownership of the car instead of half of your business shares.
Divorce can be a very complex process, and when you own a business, that complication can exponentially increase. By understanding your rights and what is likely to happen to your business, you can better prepare yourself and your partners for what lies ahead.