When you first had the idea for your business, it probably seemed like an impossible dream. However, with the support of your friends and family and the follow-through that few people possess, you took an idea and built it into a successful company.
Unfortunately, running your own business is a stressful endeavor. You likely had to put in a lot of hours to build the company from scratch into something that could provide a decent life for your family. All of that time at work could have put a strain on your marriage.
Even if the company itself didn’t play a role in the deterioration of your marital union, the business can be at risk when you or your spouse file for divorce. It is very common for small business owners in New Jersey to worry that their ex has a claim to the company.
When did you start the company, and what money did you invest in it?
When couples divorce in the Garden State, the courts will do their best to produce a fair outcome for both spouses. Lawmakers enshrined that concept in law under the state’s equitable distribution statute. Effectively, this law guides the process of asset division in New Jersey divorce, instructing the court to consider many factors from the marriage when determining what is a fair and reasonable way to split assets.
Everything you earn or acquire while married, other than an inheritance or gifts, is likely subject to division. That will likely include your business and business assets. The date that you formed the company is of critical importance.
Did you start it when you were already married? If so, did you use income or assets acquired during your marriage to form the business? Did your spouse help support you during that time, or did they invest time or money in the business?
All of these concerns will impact how the courts use the business. If you formed it during the marriage, or your spouse otherwise contributed to the business or your ability to run it, they may consider some or all of the value in the business to be marital property and thus subject to division.
Consider setting your own terms through divorce mediation
Handing over control of your company and its assets to the family courts probably isn’t what you want to do. Choosing mediation with your spouse allows you to maintain a level of control over the outcome. You can negotiate with your ex and find a way to compensate them for their contributions or your use of marital funds without endangering your ownership of the business.
Before you start that process, you should consider talking with an experienced New Jersey family law attorney about the best strategies for protecting your business as you move forward with the divorce.