As a general rule, New Jersey law classifies a family business as a joint asset. Unless you take action, you could lose a portion of your company in a divorce settlement. Fortunately, you may be able to take certain steps to retain control of your company regardless of what happens between yourself and your spouse.
Include the business in a prenuptial agreement
If you are planning on marrying your sweetheart in the near future, it might be a good idea to include your company in a prenuptial agreement. The contract can stipulate that the company retains its status as separate property in the event of a divorce. If you are already married, you can execute a postnuptial agreement to ensure that the company remains in your hands regardless of your future relationship status. A family law attorney may be able to review the terms of such a deal before it goes into effect.
Transfer ownership of the business to an outside entity
Assuming that this is done before divorce proceedings begin, you may be able to keep your business away from your spouse by placing the company into a trust. Alternatively, you can use a buy/sell agreement to minimize the risk that your spouse obtains a controlling interest in the company after a divorce. The agreement may include language limiting who is able to acquire your share of the company after it has been liquidated.
If you own a business, it may be a good idea to consult with a family law professional. He or she may help you take steps to retain ownership of your company or other assets that you have an interest in keeping.
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