Divorce And A Family Business

What Will Happen To Our Business?

The answer to the question of what will happen to the family business depends very much on what you and your spouse wants to happen to your business. In theory, a family business in which both spouses have an ownership interest is just like any other marital asset subject to equitable distribution. In practice, dividing a family business via equitable distribution in New Jersey may be both difficult and undesirable. For example, an ongoing business is almost always worth more than what it can be sold for. Similarly, if an ongoing business is split into two smaller businesses under a divorce agreement, those parts will seldom, in the short term, add up to the value of the former whole.

Alternative Options

Quite possibly, a business may simply not be liable to a hard division (it has a single physical location, for example). Sometimes one spouse is willing to be bought out of a business, but the other spouse does not have sufficient cash on hand to facilitate the transaction. In this case, a divorce agreement may be structured in such a way where ongoing payments are made to the spouse being bought out of the business. Those payments, in total, will amount to a fair estimate of the portion of the value of the business payable to that spouse.

Valuing the Business

Of course, valuing a business is nearly as much art as science. The spouse retaining a business subject to equitable distribution will often put forward a much different- and lower- value for the business than will the spouse seeking to be paid a percentage of that business’ value. If you are a business owner with your spouse and are about to go through a divorce in New Jersey, you should seek the advice of a competent New Jersey family law attorney who has experience in valuing businesses subject to equitable distribution and who, as part of his or her representation, consults with certified financial professionals.

Vincent DeLuca is a High Net Worth Divorce Attorney

Vincent C. DeLuca of Villani & DeLuca, P.C., is certified by the New Jersey Supreme Court as a Matrimonial Attorney. Mr. DeLuca is one of a limited number of attorneys to hold the prestigious certification of Matrimonial Attorney in New Jersey. Mr. DeLuca, whose practice is devoted to Family Law in Ocean County and Monmouth County, is one of only five certified Matrimonial Attorneys on the Roster of Mediators for Economic Aspects of Family Law in Ocean County, New Jersey. Call Villani & DeLuca at 732-965-3350 for your free initial consultation.

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