Value of the Business
If you own a business and are getting a divorce, the business valuation of the business is vital to a fair settlement of your divorce case. The starting point really is knowing what the value of the business is, as well as what the income is, regardless of whether you are a self-employed owner of a business or not. Whether you own a business, your partner owns a business, or you are co-owners of a business in New Jersey if you are considering divorce you need to have a business valuation to reach a fair settlement.
10 FAQs Regarding Business Owners and Divorce
1. In general, how are business assets divided during a divorce?
A business in New Jersey would typically be divided with the non-owner spouse receiving less than 50% of the fair value of the business.
2. Can a business owner use the company’s accountant to value that business?
A business owner can use the company’s accountant to value that business during a divorce, but shouldn’t because these accountants are not forensic accountants and may lack the experience needed to evaluate the business for the purpose of property division and divorce.
3. How can a business owner protect their company during divorce?
The easiest way to protect your company during a divorce is to cooperate with the other party. This includes disclosing all requested documentation.
4. Are professional practices considered assets of the marriage?
Yes, professional practices are considered assets of the marriage; however, New Jersey recognizes a carve-out for the premarital component of an asset.
5. If one spouse owns a business, should the couple file a joint tax return during divorce?
Typically, filing jointly is the best financial option (opposed to “married, filing separate”). However, if one spouse believes assets are being hidden, consulting with an attorney and private accountant may be best to determine if filing separately is optimal.
6. If a high-wage earner’s income plummets before divorce, would that affect support payments?
Support payments can be influenced if a high-wage earner’s income plummets before a divorce. However, there are many factors that influence spousal support payments so each case should be examined closely by an attorney.
7. If a person believes their spouse is not reporting all income on tax returns, can you help them?
If you believe your spouse isn’t reporting their full income on their taxes, the divorce advocates at New Jersey Family Law Group can help. However, turning your spouse over to the IRS may not be the best option.
8. If both spouses have co-ownership of a business, how will it be divided?
If both spouses own a business and are equally involved in it, there may be support to divide the business equally if the couple files for divorce. In many cases, one spouse will allow the other to buy them out, but this is just one of several asset division options.
9. Can you lower your business valuation?
Knowing how to review a business valuation and how to argue the specific component that generates the ultimate value is what gives us the ability to push the value up or down depending on which side of the case we are on.
10. What advice would you give to the spouse of that business owner or executive?
If you are the non-business owner spouse, it is important that your attorney and forensic accountant are on high alert and are confident that the assets you have discovered and the cash flow that they are recommending be utilized for child support and alimony is accurate based on the facts of the case.
Protect What Matters Most
Business Owners Going Through Divorce Should Speak To An Experienced New Jersey Attorney
If you or your spouse own a business in New Jersey and are getting a divorce, the business could be a critical issue in your divorce settlement. To protect yourself and your future, it is wise to contact a qualified attorney from New Jersey Family Law Group. Our legal team is committed to securing a bright future for our clients and their families through guided insight and zealous advocacy and fighting to protect what they have worked so hard to earn.
Contact our attorneys at Stolfe Zeigler today at 732-240-9555, to get started with an initial case evaluation.