AM I ENTITLED TO A PERCENTAGE OF MY SPOUSE’S BUSINESS?
If during your marriage, your spouse started a business and now you are getting divorced you may question if you are entitled to a percentage of the value of your spouse’s business. In New York, the law is clear that a business established during the marriage and prior to the commencement of a matrimonial action or execution of a separation agreement is marital property. This means that the value of the business is subject to equitable distribution, and you are entitled to a percentage. Additionally, if your spouse’s business was established prior to marriage, the appreciation of its value is also marital property and subject to equitable distribution.
The real question is what percentage are you entitled to? The answer to this question depends on several factors such as: What were the contributions by the non-owner spouse? Was there a use of marital funds to increase its value? Was it a long marriage or relatively short-term marriage? What is the length that the business has been in operation?
In most instances if a dollar amount cannot be agreed upon, then you must retain a professional evaluation. This will be expensive.
There are many methods to value a business which you and your spouse have built while you were married. If you do not want to hire a forensic then an accountant may be able to perform the evaluation. While you will have to pay the accountant the cost will be less expensive than a forensic evaluator. Hopefully you can avoid the need to hire an expert and the two of you can agree on a valuation number.