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A common concern is if a spouse owned a business prior to marriage or started a business during the marriage and now you are getting divorced----are you entitled to a percentage of this business? 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.   Furthermore, if the business was established prior to marriage, the appreciation of value, where there have been contributions by the other spouse or the use of marital funds to increase its value, is marital property.   If one spouse, however, did not contribute to the business there can also be the argument that “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 a forensic must be retained 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. 


Hopefully you and your spouse will be able to decide on a value and a percentage for the non business owner spouse as this will save thousands of dollars in fees along with extra time in litigation.

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