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Cox Padmore Skolnik & Shakarchy LLP remains ready to serve you during the COVID-19 pandemic. We are prepared to provide you with continuous legal service and uninterrupted communication. We are also monitoring the legal impact of COVID-19 and we are available to discuss any questions you may have regarding the CARES Act, insurance coverage issues, including business Interruption insurance, or other issues. Please see below for a list of our practice areas. You may contact us by the usual means of telephone and email, which is encouraged at this time. We will promptly respond. Video conferencing is also available. In all, our firm remains committed to assisting you throughout this evolving period of legal, business, and safety concerns.

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  4.  | Don’t want to be business partners with a former spouse?

Don’t want to be business partners with a former spouse?

| Apr 4, 2017 | None

Do you find yourself thinking about the net worth of your business assets while simultaneously planning your New York wedding? Some might say business and weddings don’t go together, and trying to blend the two fails in the romance department. Yet, others understand that business interests often encompass a person’s greatest assets, and their protection remains of paramount importance, even when (and perhaps, especially when) planning a wedding.

It’s only natural that you’d want to think ahead and protect those interests as best you can since neither you, nor anyone can predict the future. You and your soon-to-be spouse intend to spend the rest of your lives together. You might even have plans to work together in some aspect of your business. Despite these facts, part of what makes you a successful in business lies in your ability to be proactive and take preventative measures when possible to avoid problems down the line. 

Does marriage mean you own everything 50/50? 

Every state has its own laws regarding marital property. Most states, including New York, are equitable property states. The court determines how to divide assets fairly in divorce in equitable distribution states although such division may not necessarily be equal. The first task in most divorces involves identifying what property belongs to you alone and what property constitutes the marital estate.

So, how do you know what you own separately from your spouse? The following typically applies: 

  • If you are a beneficiary in someone’s will, the inheritance you receive belongs to you and not your spouse.
  • If you obtain a settlement or compensation through a verdict in a personal injury claim in a civil court, monies therein constitute separate property.
  • Anything you own before you get married is separate property.
  • If someone gives you a gift not intended for your spouse, then it is a separately owned asset. 

Sometimes, something that you own separately becomes joint property. For instance, if you take money inherited from your grandfather and deposit it into a financial account bearing both your and your spouse’s name, that formerly separate property could become marital property. Furthermore, a portion of any separate assets that increase in value during the marriage might become part of the marital estate.

How to protect business assets 

Prenuptial and post-nuptial agreements provide two options to help you protect your business assets. A short list of facts about each follows: 

  • Prenuptial contracts are negotiated and executed before marriage.
  • They must be set forth in writing and signed by both intended spouses.
  • An appropriate third party (such as a notary) must witness prenuptial agreements.
  • Full disclosure of all assets is a strict requirement for prenuptial contracts.
  • A married couple may enter a post-nuptial agreement.
  • Post-nuptial contracts often fail due to challenges from your spouse or invalidation by the court.
  • Some states do not recognize post-nuptial agreements. 

Either in addition to or in lieu of a prenuptial or post-nuptial agreement, you could have the business pay you a competitive salary to help you avoid losing business assets in a divorce. You might choose not to involve your new spouse in any aspect of their businesses, since more involvement typically means more rights to shares or assets in division. Still other options might exist depending on your circumstances.

A New York attorney experienced in high net worth divorce can clarify all laws and guidelines that may pertain to your particular situation. Whether you are planning to walk down the aisle toward a future of marital bliss, or, are coming to the end of your journey and are seeking guidance in preparation of divorce, an experienced attorney can advocate on your behalf to protect the business interests you worked so hard to acquire.

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