Divorce can be complicated, especially when a family business is involved. In New Hampshire, the division of assets, including a business, depends on several factors. Understanding these factors can help you protect your interests.
Marital vs. Separate property
To determine what happens to a business during a divorce, it is essential to identify whether the business is marital or separate property. Marital property includes assets acquired during marriage. Separate property refers to assets owned before marriage or received as gifts or inheritances. If a business starts during the marriage, the court will consider it marital property.
Equitable distribution in New Hampshire
New Hampshire uses the equitable distribution model, where the court divides marital property in a fair manner, but not always equally. The court considers various factors, such as the duration of the marriage, each spouse’s contributions, and their financial circumstances. The court considers a business’s value and how the couple managed it during the marriage as crucial factors in this process. Courts may use different valuation methods, such as market valuation or income-based valuation, to determine a business’s worth.
Protecting your business
There are ways to protect a business from becoming marital property. A prenuptial or postnuptial agreement can clearly define business ownership. They help prevent disputes over business ownership in case of divorce. Additionally, shareholder or operating agreements can outline ownership rights and transfer restrictions. These documents can safeguard the business by requiring approval for any ownership transfer.
If multiple owners are involved, a buy-selling agreement can be beneficial. This agreement specifies what happens to a spouse’s business shares in a divorce. It may require the sale or buyout of the divorcing spouse’s interest, ensuring the business remains stable.
Consult a divorce attorney
Divorce involving a family business can be complex. Consulting an experienced New Hampshire divorce attorney is crucial. They can provide guidance on protecting your business interests and navigating the legal process. An attorney will help you understand your rights and options, ensuring your business remains secure.
Handling a family business during a divorce in New Hampshire requires careful consideration of property classification and legal protections. By understanding these aspects and seeking professional advice, you can better manage the future of your business amidst personal changes.
