The concept of equitable distribution in a New Jersey divorce considers a wide array of issues in an effort to make reasonably objective decisions that can leave both parties in similar financial positions as they begin their new lives. Still, every marital asset, from household items to the home and other properties, can raise many issues.
When a family business needs to be addressed as part of divorce, however, each Denville divorce lawyer at our firm can attest to the fact that property distribution becomes exponentially more complicated — almost like deciding two separate divorce cases before blending them back into a single case.
A Family Business is More Than Just Another Property
As a general rule, divorcing spouses must look at some basic issues when considering what represents an equitable distribution of the family business:
- Do they liquidate the business and divide the proceeds, or do they want to continue operations?
- How do they accurately value the assets and liabilities so they can be fairly distributed between both parties?
- If the business will remain in operation, how do they determine and divide future profits?
- Do other business partners exist to further complicate the issues?
Of course, even these primary decisions are anything but straightforward. Since any business is like a living entity, everything from the history of the business to its future prospects factors into the determination of property distribution issues during divorce.
Perhaps the simplest issues might involve identifying whether the business existed prior to marriage or whether a non-owning spouse agreed to use marital assets to pay business expenses during the marriage. However, the issues also extend way beyond situations like these. Both parties may need to consider seasonal and countless other issues related to a business’ specific industry that may inflate or deflate the value of a business at the time of divorce.
Dividing a Business Can Require a Virtual Team of Experts
Certainly the company accountant can produce financial records to provide a starting point for determining its value, but valuation is certainly not this simple. Independent accountants and auditors are needed to help ensure the accuracy of the books. Additionally, the courts are likely to require valuations prepared by independent business appraisers — particularly those with specific expertise in the company’s industry and types of operations.
At the heart of negotiations is an attorney experienced in negotiating asset distributions involving family businesses. The legal team at Veres & Riordan LLC can recommend expert resources to achieve accurate and fair valuations. We regularly help our clients negotiate fair agreements without leaving the decisions in the hands of the courts. To learn more about the process, call us or use our convenient online contact form.