Divorcing couples in New York often have a lot of personal and financial matters to address. The more property a couple shares and the more complex their assets are, the greater the likelihood that the couple will have major disagreements about property division.
Real estate and investments account can often trigger intense disagreement during divorce negotiations. A family-owned business can also make it harder for a couple to resolve their property division disagreement. You may count on the business as your sole source of income, and it may be the product of years of investment and personal sacrifice.
Will you likely have to split your business with your spouse in a New York divorce?
Equitable division does not mean a 50/50 split
The first thing that those considering divorce in New York need to understand is that property division is not always a 50/50 split. Under equitable distribution rules, judges should try to find appropriate and fair property division solutions, and what is fair may not be even.
Factors like someone’s separate property, their health issues and their current income can all affect what the courts view as appropriate for property division. A judge will likely recognize that you have the experience to run the business as you always have, while your spouse may not have the necessary skills to share that role.
More importantly, your business may not be marital property or may only be partially marital property. Depending on when you started the company or how you took ownership of it, some or all of your interest in the company might be separate property. Your chances of protecting the property from property division claims increases if you have a marital agreement addressing the company.
If your ex has a claim, they don’t have to split the business
Even in a scenario where the courts would likely agree that your business is marital property, that doesn’t mean a judge will give your ex an ownership interest in the company. They might instead consider the value of the business when dividing other property, like your retirement savings or your real estate portfolio.
You can potentially protect your business from risk by negotiating a property settlement outside of family court or drafting a postnuptial agreement before you file for divorce. Taking steps to protect your most valuable assets is often necessary during a high-asset New York divorce.