When a couple decides to divorce in New Jersey, the division of assets can become a complex issue, especially when it involves a family business. The business often represents not just a significant financial asset, but also a source of livelihood and family legacy.
This blog will delve into the potential impacts of a New Jersey divorce on a family business and discuss some strategies for managing this complex situation.
Understanding equitable distribution
New Jersey follows the principle of equitable distribution in divorce cases. This means the court divides marital assets, which can include a family business, in a manner that is fair but not necessarily equal. If both spouses contributed to the business, either directly or indirectly, or if the business grew in value during the marriage, it may be subject to division.
Protecting the business
There are several strategies that can help protect a family business in a divorce. One option is to determine an accurate valuation of the business. A professional business evaluator can assess the worth of the business, which can be helpful in negotiations.
Another strategy is to consider buying out the other spouse’s share in the business. If one spouse has a stronger connection or plays a more active role in the business, they might consider buying out the other spouse’s share. This can allow the business to continue operations and preserve its value.
Considering alternative solutions
If a buyout is not feasible, there are other alternatives to consider. Spouses might choose to co-own the business after divorce, especially if they can maintain a professional relationship. Another option could be selling the business and splitting the proceeds.
A New Jersey divorce can have significant impacts on a family business. However, by carefully considering these options, it is possible to navigate a divorce while preserving the family business.