A New Jersey business owner entering into the divorce process will learn that business assets could very well be counted among marital property and thus subject to division. To provide some level of protection in the event of a divorce, business owners are looking to prenuptial agreements before marriage. This document will spell out the ownership of the business assets and establish what claim, if any, a future spouse might have. Partners and other shareholders appreciate these legalities because they offer some assurances about the future.
New Jersey follows the principle of equitable distribution during the property division stage of a divorce. Accordingly, a court will make its decision based upon what it believes to be fair. In so doing, it will take into account several factors.
For example, a business established before someone gets married will be looked at, and in many cases only the portion of the company's value that accrued during the marriage will be deemed marital property. Judges also realize that a business is not easily liquidated, and it could be better from a spousal or child support standpoint if it continued to produce income.
A business owner who desires a prenuptial agreement could consult with an attorney about how to keep a business separate from a marriage. Alternatively, the agreement could designate a fair share for the future spouse if the marriage ends. It is advisable for each party to have separately-retained counsel during the process. If such an agreement is subsequently introduced during divorce proceedings, the court will apply principles of contract law when assessing its validity. For example, the court might disregard the agreement if it was found that one of the parties had been coerced into signing it.