Partner
One of the most basic functions of a New York divorce court is the division of a divorcing couple’s marital property. No matter how many assets are determined to be marital assets or their value, the court will generally seek to assign a value to the assets and divide them fairly and equitably between the parties.
Properly valuing tangible assets like houses and cars can be challenging enough. However, when your marital estate includes a business and its related assets, the court’s task becomes even more complicated. It is not uncommon for a court to rely on one or more experts to ensure the business is handled appropriately during a divorce.
How New York Divorce Law Treats Business Assets Generally
In New York, nearly every type of asset that either party acquires during a marriage is considered to be a marital asset and is subject to division. This can include a business and its tangible and intangible assets. If you operated a business while married, then a court can consider the following marital property:
- The anticipated cash flow and value of that future cash flow to the owner
- Any real property owned by your business
- Stocks you acquired in your business
- Machinery used by your business
- Your business’s intellectual property
- Profits realized by your business during the marriage
- Customer lists and other intangible assets
Absent a prenuptial agreement, a court will consider the value of each of these and any other business assets and any increase in value they experienced during the marriage. Even if you leave the marriage retaining control of your business and its assets, the court could offset this award by awarding you less of other types of property.
The Importance of Accurate Valuation
One of the chief difficulties when dealing with business assets in a Garden City divorce is properly valuing the business and its assets. Some less-than-honest business owners may attempt to hide assets or undervalue their business in the hope that their ex will accept their valuation. This can cause the dishonest business owner to walk away from the divorce with a disproportionate amount of the marital estate.
Instead, if you or your partner own a business, it is strongly advised that you retain the services of someone skilled in valuing that kind of business. Each party can hire its own expert, or the parties can jointly decide on one expert to investigate the business and report on the value of its assets.
If the valuation of the business seems off, seeking a second opinion may be advisable. Once the court accepts the business’s valuation and enters final property division orders on that valuation, it is difficult to undo those orders. You may be stuck without alimony or with fewer assets than you would have received had a proper value been assigned to the business.
For example, suppose that your ex owns a business and claims it is worth $0. Your overall marital estate is worth $500,000. If the business is valued by an accountant, perhaps it could add an additional $500,000 in value, doubling the marital estate from the initial financial disclosures, and you may be entitled to equitable distribution of a percentage of the value in the business in addition to other assets.
Seek Help From an Experienced Garden City Property Division Lawyer
Even in a collaborative divorce, you want to ensure all assets, including business assets, are valued accurately so that a fair division of property can occur. If you are thinking of filing for divorce or if you are already in divorce proceedings, contact the Garden City, NY law firm of Aiello & DiFalco and request to speak with one of our experienced family law attorneys.
We can review all disclosures and financial statements given to you by your ex and look for signs of fraud. If you are a business owner, we will work with you to protect your business assets while still being truthful and honest. Turn to Aiello & DiFalco for help by scheduling your consultation with us today.