The Buzz on Businesses


Own your own business? Or does your soon-to-be ex? You should be aware that the rules for the equitable distribution of businesses are different than for other assets.

In most cases, courts will divide the marital assets equally. But the value of a wholly owned business is usually not divided equally. Current decisions from the Appellate Division, Second Department are giving the non-titled spouse between 10 and 30 percent of the value of the business. If the non-titled spouse actually worked in the business, he or she will get a higher percentage. If not, expect the percentages set forth above.

Keep in mind that the foregoing discussion assumes that the business is entirely marital, i.e., the business was started during the marriage with marital funds. If the business was started prior to marriage, the non-titled spouse could still make a claim for the portion of the appreciation of the value of the business that accrued during the marriage.

Also, keep in mind that there are different methods for valuing businesses. The method used to value the business is an entirely separate issue.

The bottom line is that case factors are important, such as whether the non-titled spouse worked in the business and whether marital funds were used in it. But the current trend is downward for a non-titled spouse.