Getting a divorce can be an emotionally taxing process due to conflict between spouses and stress related to addressing and resolving financial issues and other concerns. The division of marital property is one of the most important factors in a divorce, and it can become especially complex for spouses who are business owners. By understanding the potential options for the division of business assets, divorcing spouses can make decisions that will protect their financial interests.
Marital Property Vs. Separate Property
When determining how business assets may be addressed during the divorce process, it will be necessary to understand whether a business is considered marital property. A business that a spouse owned before the couple got married will usually be considered separate property that is solely owned by that spouse. On the other hand, if either spouse founded or acquired a business after the couple got married, it will be a marital asset, and it will most likely need to be addressed during the property division process.
Business Valuation
One of the first steps to take when addressing business assets in a New York divorce is to determine the value of the business. A business valuation will usually be necessary regardless of whether a business is marital property or separate property, since this will determine the financial resources that will be available to each spouse. There are several ways to value a business, including evaluating the business's assets and liabilities, determining a potential purchase price based on recent sales of comparable businesses, or considering cash flow and profits to understand how the business's value may increase in the future. It will often be necessary to work with financial experts such as accountants and appraisers to understand a business's value.
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