Are Business Assets Part of the Marital Estate?
In New Jersey divorce proceedings, the legal principle of equitable distribution applies to the division of marital debts and assets. Equitable distribution mandates that property accumulated during the marriage be “fairly” allocated upon its dissolution, but that does not mean the property must be divided equally. Assets subject to equitable distribution include real and personal property, financial accounts and investments, retirement assets, and business interests.
What Business Assets Are Part of the Marital Estate?
When determining whether a business asset belongs in a marital estate, the first question is whether it was acquired before marriage by only one party (in which case, it’s considered separate property) or acquired during the marriage (in which case, it’s marital property). Business property also can be separate property if acquired after the filing of a divorce complaint. Accordingly, any business interests that one spouse held or owned prior to marriage, or after filing for divorce, remain the sole property of that party.
It’s important to understand, though, that business property brought into the marriage by one party can become marital property, depending on how it’s used, created, or treated during the marriage. For example, suppose one spouse solely owns and operates a business before marriage, and then, once married, the other spouse quits their job and invests time, money, or energy into developing the business. If it can be shown that both parties directly participated in growing and increasing the value of the business during the marriage, the court might consider it a marital asset.
Contact an Experienced New Jersey Family Law Attorney
At the law office of David M. Lipshutz, we won’t take your case unless we know we can help. For a private meeting, contact our office online or call us at 856-627-1990. We are available to meet with you Monday through Friday, between 9 a.m. and 5 p.m.
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