Photo Of Attorney Jane K. Cristal

Protecting Your Rights And Best Interests

In Divorce And Other Family Law Matters

Should you fight for part of your spouse’s business when you divorce?

On Behalf of | Nov 5, 2020 | Uncategorized |

If your marriage is heading for a divorce and your partner has a successful business, you may think you should fight to gain a share in the company. While that’s definitely an option, it might not be your best one.

Here are some things you should consider:

  • You may want to trade your interest in the business for some other assets. Under New York state law, marital assets in a divorce are divided according to equitable distribution. A court would look at the total marital assets before deciding how to split them. Whether or not shares in the business are included in your portion of the total does not matter. You will still be getting the same cut of the overall assets.
  • You could already be precluded from taking part of the business in a split. Not all businesses qualify as marital assets. If you signed a prenuptial agreement, for example, you might have agreed to forego any claim to the company.
  • You may prefer not to be involved in the business. One major reason to avoid taking shares in your spouse’s company is to give you both a clean break. Keeping an eye on how the business to see how your shares are doing will act as a constant reminder of your past relationship. Likewise, having you as a shareholder requires your spouse to transfer money from the business to you each time they pay dividends. They could feel resentment over this, which could lead to further conflict between you. It could even lead them to neglect the business to reduce the amount they need to pay you.

Seek legal help when considering whether it is in your interests to claim a share of your spouse’s business during your divorce. They would probably prefer to keep it all themselves. You may be able to use that as a bargaining chip to keep the family home or other assets instead.