One issue in every divorce is the distribution of marital assets. New Jersey is an “equitable distribution” state, meaning that marital property is divided “fairly” (i.e., equitably)--and not necessarily on a 50/50 basis. Marital assets can include any or all of the following: homes, personal property, cash, bank accounts, brokerage accounts, retirement accounts and businesses.
Once there has been a determination as to which assets are marital and which remain as the “separate property” wholly owned by one of the spouses (that will be a topic for another blog), New Jersey law requires our courts to consider an extensive list of factors in determining the allocation of the respective ownership interests of each party in the marital property including, but not necessarily limited to:
- The duration of the marriage or civil union;
- The age, physical and emotional health of the parties;
- The economic contributions of each party;
- The standard of living during the marriage or civil union;
- Whether there exists any agreement between the parties regarding the disposition of certain property (g., a prenuptial agreement);
- The current economic circumstances of each party (and their respective earning capacities going forward);
- The contribution of each party to the acquisition and maintenance of the property as well as the contribution of a party as a homemaker;
- The tax consequences to each party attendant to the distribution of the property;
- The value of the property; and
- The debts and liabilities of the parties.
While the allocation of the parties’ respective interests in tangible assets such as real property and/or financial accounts may be a relatively straightforward exercise, the issue is much less clear when a business is involved--especially where only one of the parties established and/or maintained the business. Even when applying the factors above, there is no formulaic approach in determining the equitable allocation of each person’s right to the business.
Accordingly, if there is a business which may be subject to equitable distribution, it is important to be represented by an attorney who is familiar with the nuances of allocating the parties’ respective interests in a business. Indeed, this may be one of the issues in which the selection of counsel can have the greatest impact during a divorce. The Family Law team at Cohn Lifland Pearlman Herrmann & Knopf LLP is experienced in these issues. Call us to see how we can help you “mind your business” when it comes to the equitable distribution of a business.