When New York residents are getting their business off the ground, have invested minimal money and put countless hours of sweat in it, they hope, but never expect, it to become highly successful. Which is why they do not take precautions in protecting their businesses against a divorce. With around 50 percent of marriages ending in divorce, there is a very real possibility that a business owner may lose their business to their ex, or at the very least, have to become business partners with them. What can one do to protect their business assets against property division if there is no prenuptial agreement in place?
The first step in the right direction would be to get an independent evaluation
of the business. This can ensure no spouse over or underpays the other one. Once a valuation is completed, the couple must determine what they want to do with the business-does one want to buyout the other or split it with one another? Where one party wants to buyout the other, they can offer other assets in exchange-real estate, retirement accounts and even cash. If the party who wishes to retain their business doesn’t have the liquidity to make the payments immediately, they may be able to come to a settlement about gradual payments.
As this blog has previously mentioned, even when a prenuptial agreement is not in place, a couple may be able to enter into a postnuptial agreement. These agreements regarding property and business asset
division are recognized and enforceable in New York.
New York is an equitable division state, which means the courts will divide property equitably, not always equally. They consider what the couple put in to the marriage and what each party needs moving forward. When proving one’s case and asking for the business and compensation one deserves, it may be beneficial to get a strong advocate on one’s side.