Rochester Business Owners Divorce Lawyer

Rochester Business Owners Divorce Attorney

Divorces are full of complicated decisions. Couples must decide how to divide their assets and property, if spousal maintenance is necessary, what child support and custody look like, and much more. However, for some couples, there can be further obstacles if one or both spouses are business owners. Divorce and business ownership may seem unrelated at first. However, a business owned by one or both spouses becomes part of the divorce proceedings.

Divorcing while owning a business can raise many questions. You must make determinations concerning:

• Ownership implications
• The inheritance impact for your children
• The type of property it is classified as

You deserve the answers to protect what you have worked hard to build. At Trotto Law Firm, P.C., our experience and knowledge can provide the answers you need. We can help you through the divorce process with the optimal outcome for you and your business.

Divorce and Business Ownership

Your business becomes a part of the marriage regardless of financial contributions or when the business began. For example, you started the business before you got married. Your spouse had no financial investment in it. They may still have a legal right to obtain a portion of the business as a part of the divorce. This is due to how the growth of the company contributes to the marriage. In any marriage, there are contributions and support that extend beyond money. Spouses work with each other for emotional growth, family care, and other matters. These opportunities are considered non-financial investments. Consider how your spouse may have taken away various interruptions so that you could focus on the growth of the business.

Based on these factors, it will need to be determined if the business is considered a marital asset and to what extent. If it is not, then it might be considered the sole property of one spouse.

The Value of the Business

After a value has been assigned to the business, a financial expert will determine a monetary value for it. This is often done by using the fair market value for the type of business. This is determined by the market it is in and who is in control of it. Another way this value is determined is through investment value. This determines the worth of the business specifically for the spouse who owns it rather than its value on the open market.

When considering the value of a business, there are several determining factors, including:

• The type of business
• What the local market and environment are like
• Whether the entity of the business is incorporated or held in a partnership
• The valuation method that is chosen
• The amount of professional goodwill that was accrued

The total business assets then become part of the overall valuation of assets used for the divorce.

Equitable Distribution

New York is considered an equitable distribution state. This means that all assets a couple accumulates during their marriage are considered the property of both. When a couple divorces, the marital assets are split fairly and equally. This is done regardless of who actually paid for or provided for the accumulation of the asset. This division also includes businesses that one or both spouses run. When a divorce settlement is finalized, the business may be awarded to the spouse who primarily runs it. If this is the case, the other spouse will receive other marital assets that offset the cost of the business. This could include a residence or other property.

The equitable distribution rule is a major component of New York divorces. Therefore, the valuation placed on the business is a critical factor in the ultimate divorce settlement involving the business.

FAQs About Rochester, NY Family Law

How Do You Split a Business in a Divorce?

Placing a valuation on the business is the first step in determining what the eventual outcome will be. Once the value is set, the business becomes part of the equitable distribution in the divorce settlement. The spouses may decide to split the business. Otherwise, one spouse will be awarded additional assets to offset the lost assets from the business. There are two remaining options. One is for one spouse to buy out the other. The other is for the spouses to sell the business and split the proceeds of the sale.

How Is a Business Valued in a Divorce?

The valuation of a business is determined by several factors. The first step is to understand the type of business, the market for the business, and how the business operates. Then, the history of the business and its future earning potential are evaluated. Finally, determine who is controlling the decisions of the business and the amount of goodwill accrued.

What Is a Corporate Divorce?

A corporate divorce, also known as a business divorce, is the process of dissolving a business partnership. It involves two parties who own and operate a privately held business. Like a marital divorce, business divorces are filled with complicated decisions that must be settled between both parties. These include finances, property, and other company assets.

What Is My Spouse Entitled to in a Divorce in NY?

In any New York divorce, both spouses are entitled to any property that is considered marital property. The couple might have a prenuptial or postnuptial agreement that specifically outlines how various properties are to be defined. Otherwise, all assets and debts accumulated during the marriage are split between the couple. This provides both spouses with a fair and equitable result. However, this is not always 50/50.

Rochester Business Owners Divorce Lawyer

Any divorce is difficult. When you have focused your energy on building a successful business at the same time, it can fill you with anxiety. You are left wondering what will happen to what you have worked so hard to build. You do not, however, need to face these challenges alone. Our divorce lawyers at Trotto Law Firm, P.C., can help put your mind at ease. We can apply our knowledge of the law to your circumstances. Our firm can help you understand your options and put together a plan to reach the outcome you are seeking. A divorce in your marriage does not mean you need to divorce your business. Contact our offices today.