If you own a business and are considering divorce, you may worry about whether you will have to sell it. In many cases, the answer is no. However, the business may still play an important role in the division of marital property.
Before a court can determine how to address a business, it may first need to determine whether all or part of it is subject to equitable distribution and what it is worth.
How courts determine a business’s value
If your divorce involves a business, the court may need to determine its value before addressing property division. To do that, the court and the parties may review information such as:
- Financial statements
- Tax returns
- Business assets and liabilities
- Company income and expenses
- Other business financial records
No single document determines a business’s value. Instead, the available financial information helps create a clearer picture of the business and its place within the marital estate.
How a business valuation affects property division
Valuing a business does not automatically require either spouse to sell it. Instead, the valuation helps determine how to address the business during property division.
One spouse may keep the business while the other receives different marital assets. In other situations, the parties may reach another arrangement based on the circumstances of the case. Selling the business is one possible outcome, but it is not the only one.
Looking at the bigger financial picture
Courts typically consider a business alongside the rest of the marital estate. They also consider real estate, retirement accounts, investments and other assets when dividing marital property.
If your divorce involves a business, its value may affect more than ownership of the company. It can also influence how a court divides the rest of the marital estate under New Jersey’s equitable distribution laws.
