Do you and your spouse share assets and are starting the divorce process? Read these 3 equitable distribution tips, then call our lawyers now.
Dividing a Family Business
Family businesses are difficult elements for us to assess. In many cases, we have worked with clients who had worked for a family business and had received shares or portions of that business from relatives. The burden has initially been upon us in these cases to prove that the grant of shares in the business was not in exchange for work provided. If the grant had been in exchange for work, the shares of the business or marital property had not been earned during the marriage.
If the shares had been granted as a gift from the other family members, the shares are then considered separate property. In this case, there is still a question as to whether there has been any increase in value in the family business subsequent to the grant of the shares. If there has been, then the other party can try to prove that the increase in value was due to the efforts of her or his spouse, rather than because of market forces.
If the increase was due solely to market forces, then the other spouse is not going to be entitled to any share of that business. That is a difficult thing to prove with a business, however. If the value of the business has increased due to the efforts, in any way and in any measure, of the spouse who has been gifted the shares, then the other spouse has a claim to some of that appreciation in value.
Handling a Mutually Shared Business
- A business in which both parties work is usually one started by one of the parties or in which one party has more of a vested interest.
- Depending upon the type of work, the more-interested party may be more of a principal in the business, and it will be natural for that party to retain the business.
- Sometimes, however, if the parties started the business together, it can present significant challenges.
- Although it is not always advisable, some parties are able to continue working together, and can remain partners. Success depends upon the parties themselves, and the level of their acrimony or cooperation.
- A high-conflict divorce, however, will make it impossible for both parties to continue running that business.
Protecting Your Retirement Account
Often get asked as a Saratoga Divorce Lawyer about protecting a retirement account during a divorce. When you start a retirement account prior to marriage, it is considered separate property. I advise clients as a Saratoga Divorce Lawyer that once married the funds will be viewed as equitable distribution.
Do you run a mutually shared business with your spouse and you are starting a divorce? After reading these 3 equitable distribution tips, contact dedicated Saratoga Divorce Attorney Jean Mahserjian for help.
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