Any business owner going through a divorce experiences stress and concern. Although divorce is challenging for everyone, business owners have the added worry of what might happen to their company and livelihood.
However, the positive aspect is that divorce does not need to cause major disruptions to business interests and operations. By seeking assistance from an appropriate divorce lawyer, such as Cammarata & De Meyer P.C., it is possible to negotiate and safeguard your business during and after the divorce process.
Property Division in New York Divorces
Under New York law, divorcing spouses must divide all community property fairly and justly. This means that even if you are the sole proprietor of a business, some or all of your business interests may still be considered part of the community estate. If the business was established after the marriage, the entire enterprise will be deemed community property. On the other hand, if you owned the business prior to the marriage, the increase in the value of your ownership during the marriage will be regarded as community property. In either scenario, you must address the business as part of the divorce proceedings.
How Will You Value the Business?
To ensure a fair distribution of assets, it is crucial to obtain an accurate valuation of your property. This involves determining the value of your business interests so that you are aware of their contribution to the community property. There are several methods for valuing a business, including:
- Cost Approach Method: This method derives the value by calculating the fair market value of the business’s net assets.
- Income Approach Method: This approach assigns a value to the business by computing the present value of expected cash flows.
- Market Approach Method: This method estimates the value based on the selling price of comparable businesses that were recently sold.
How Will You Divide the Business?
When it comes to dividing the business as part of the community estate, you have several options available, depending on various factors such as whether you own the business with your spouse or independently and whether you plan to continue operations after the divorce. Some of the options to consider include:
- Selling the business and dividing the proceeds.
- Continuing to operate the business with your spouse.
- Buying your spouse’s share of the business interest.
- Offering your spouse other property (such as the family home) in exchange for keeping the entire business intact.
It’s important to carefully weigh all the options available to you and decide what works best for your situation. Additionally, both you and your spouse must agree on the property division plan. If your spouse is unwilling to accept other property in exchange for relinquishing interests in the business, your attorney will need to negotiate on your behalf. Mediation or litigation may be necessary to achieve the best possible property division outcome for you and your company.
Speak to a Reputable Staten Island Divorce Lawyer Near You
No one wants to see a business they’ve built over the years fall apart due to divorce. It’s crucial to work with an experienced divorce attorney, such as those at Cammarata & De Meyer P.C., who will fight for your interests. To secure the future of your business, please contact us online or call us at 718-612-7479 or 718-494-3288