How Can You Protect Your Business in a Divorce?

We’ve said it before … divorce sucks. It can be even worse for a couple who owns a business, or for only the business-owning/running spouse. Forbes published an article several years ago with some generalities to consider. For example, a pre- or post-nuptial agreement is a practical solution although it isn’t always the easiest conversation to have with a spouse or intended spouse. The document would outline the handling of the business in the event of separation.

Other couples may not formalize anything, in which case, thorough and transparent documentation of all business matters is imperative - for many reasons, but especially in the event of a separation.

As discussed in our recent blog post, New Jersey is an equitable distribution state … which means that a spouse may be entitled to a share of the business if it was founded or acquired during the marriage - even if he or she wasn’t directly involved in its funding or functioning. And this is a two-way street … a spouse who was not involved in the business could also be on the hook for any debts owed by the business.



A business received as an inheritance may be able to be kept separate, depending on the organization and maintenance of business and marital assets. A business acquired before marriage may also be vulnerable depending on its valuation before and after the nuptials took place. Further, the business entity type also matters in the state of New Jersey. As you can see from this short blog post, like so many aspects of law, equitable distribution in a divorce is quite nuanced. At Gray Law, we work with professionals in other industries to complement our own efforts, such as financial advisors, forensic accountants, real estate appraisers, business valuation experts, etc.

Contact our team today to discuss your situation and we will work together to find solutions.