A common question asked is if a spouse owned a business prior to the marriage or started a business during the marriage are you entitled to any part of it? In New York a business established during the marriage and prior to the commencement of a matrimonial action or execution of a separation agreement is marital property and subject to equitable distribution. Additionally, even if the business was established before the marriage, the appreciation of value, where there have been contributions by other spouse or the use of marital funds to increase its value, is marital property also subject to equitable distribution. If one spouse, however, did not contribute to the business there can be an argument made, “but for” the indirect contribution of that spouse, the business owner spouse would not have been able to focus his/her attention on the business and consequently, the business would not have developed as it did.
How will the Court value the business? In most instances if a dollar amount cannot be agreed upon between the parties then the parties must retain a professional for an evaluation. Keep in mind this cost is expensive. The portion of your equitable share will be determined on your contribution to the business, the length of the marriage and the length that the business has been operating.
There are many methods of valuating a business, but it is important to start the valuation process, so hire an attorney to protect your interests as soon as possible.