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Category Archives: Prenuptial Agreements

Protect Your Chester NJ Business, its Assets & Partners

Safeguarding yourself as well as your business and its assets from most lawsuits, including divorce, is important. Morris County Lawyers can recommend a smart legal and business strategy. 973-828-0829

Business plans to protect your business and its assets during divorce
Your attorneys will guide you towards smart business strategies that protect your business and all its assets during divorce

In this article we will review several prudent practices to protect your business during divorce in New Jersey.

We will review five smart suggestions that could contribute to keeping your business and its assets safe and strong with three additional divorce-focused recommendations.  Your attorneys at Townsend, Tomaio & Newmark can elaborate on how these apply to your business and divorce situation and explain equitable distribution parameters in New Jersey, as well. Lastly, we will explain the three most common methods for distributing a business in divorce: Buyout, Co-ownership and Sell.

8 Prudent Practices to Protect Your Morris County Business in Divorce in NJ

1.Agree with your spouse on a pre- or post-nuptial.

2.Maintain good records, and keep your family’s finances separate from those of the business.

3.Pay yourself a good salary.

4.Get fair valuations of the properties using both a neutral, court-appointed valuation professional and one who you hire.

5.Keep comprehensive insurance policies (automobile, health, workman comp., liability, life, theft, hazard, etc.) for the right amounts and stay current with your premium payments .

Smart Suggestions to Legally Prepare Your Business for Divorce in Parsippany NJ

Your attorneys will protect your business & assure it survives divorce
Make plans to assure your business survives divorce

6.If your spouse is actively involved in the business, separate him/her from active participation in the business as soon as possible. The greater his/her role and time in the company, the better chance his/her attorney will make a case that the spouse contributed significantly to build the enterprise and is entitled to benefit from its growth.

7.Get an agreement for you to make any payments to your ex on a regular basis over time.

8.If you are low on cash, raise capital by selling a (minority) stake, possibly to employees in an employee stock ownership plan.

3 Methods to Regain and Retain Control of the Business

Equitable distribution (click here) of property (including debts) is explained here.  A first step in this process is to categorize a property and then determine its value.  a non-owning spouse’s stake in the business, if any. How would you go about “splitting” this stake? Your attorney at the law firm of Townsend, Tomaio & Newmark working in the communities of Chatham, Mendham, Harding and across Bergen County has profound expertise in this area and will advise you about your specific situation. In the meantime, there are three common methods for distributing a business interest in divorce:

Buyout

A buyout is the straightforward purchase of your spouse’s stake in the business. The key is for you and your ex to get and agree on a fair and accurate valuation of the business. Be honest and transparent.

It is not a good idea to deliberately undercut the value. If your spouse finds out in the future that the value was (or could have been) more, or that it increased shortly after the divorce, you’ll probably be facing another lawsuit soon that is practically guaranteed to be long and expensive.

Get an acceptable and accurate valuation to for your business and its assets
Get an acceptable and accurate valuation to protect your business

By the way, a buyout only works if you have enough cash to pay your spouse or if he/she agrees to a schedule of payments (#6 above). This is called a structured buy out. It can be structured in any manner for any term that is agreeable to both spouses. Your attorney will have suggestions based on lots of experience in this area. A buyout might also be paid through a trade of marital assets, for example, your share of the house for your spouse’s share of the business. The conversion of other liquid assets is another possible option for paying a buyout obligation.

ASK YOUR ATTORNEY at Townsend, Tomaio & Newmark *973-828-0829* how a structured buyout would look for your business, the tax implications of these payments, and if they are covered by the business.

Co-Ownership

Protect your business by making joint- or co-ownership work
Continuing with a business through joint- or co-ownership can work

Another way to distribute a business asset in divorce is simply not to distribute it at all. It’s not unreasonable or impossible for both of you to jointly own and continue to run the business together after the divorce. That depends on you and your spouse and if you can establish a productive professional and respectful relationship post-divorce.

An alternative to the joint- or co-ownership option might be for one of you to actually work and run the business, while the other agrees to accept payments from future business proceeds. There could be a risk, though, if the business hits a down season or doesn’t generate a steady profit.

Sell the business

Protect your business with an accurate valuation that includes relevant factors
Many factors combine to determine valuation

A third option is to agree to sell the business and divide the profit fairly and equitably (not necessarily 50-50). Selling properties is quite common and sometimes the easiest option. For example, it’s common to sell the marital home and for you and your spouse to split the proceeds –especially if one of you is planning to move away.

However, selling a business might sound easier than it is. Business size, brand recognition, and market niche, along with actual and projected profits, are all important factors that could make a quick sell difficult. Market fluctuations can have a serious impact on the value of the business, so take this into consideration as you work together to assess a fair value.

Understand the New Jersey pros and cons to every strategy

These are the most common practices, but there are others. You can opt to use different methods for different assets. Naturally, there are pros and cons to each of these that you will want to understand in full before selecting a method of distribution.

As far as your business is concerned, there’s more to it than just you and your spouse. Having a competent and experienced attorney will give your partners, clients and creditors assurance about a stable future.

Your attorneys at Townsend, Tomaio & Newmark are here to help in both Morris and Bergen counties.

We’ll put our expertise and experience to work to help you to structure the best protections that will ensure that your business comes out of the divorce intact. Contact us online or call us today at 973-828-0829 for a free and confidential consultation. The earlier you prepare your strategy the better chance it will be effective in protecting your business and its corresponding business assets.

What is Considered a Default Divorce?

Contrary to popular belief, not all divorce proceedings are long and painful. It is actually quite common for divorcing spouses to come to amicable terms of a settlement agreement and get through their divorce with minimal interference. In some cases, this may result in what is known as a default divorce. While not all amicable divorces are ultimately… Continue Reading

What is Rehabilitative Alimony in New Jersey?

For spouses going through a divorce, the issue of alimony and spousal support is common. However, many people do not realize that there are actually five types of alimony agreements pursuant to New Jersey divorce law. In addition to the common limited duration alimony and open duration alimony, there is also reimbursement alimony, temporary alimony during divorce, and rehabilitative alimony.… Continue Reading

Adultery and Divorce in New Jersey

It has been estimated that as many as one (1) in five (5) Americans admit to cheating on their significant others. While this number may come as a shock, unfortunately many individuals have already been impacted by infidelity within their own relationship or marriage. Many of our clients will then ask: when a marriage ends due… Continue Reading

What to Do and What Not to Do During Divorce

Divorce is much more than a legal separation. Divorce is a division of commingled lives, a major shift in family dynamic, and can be extremely stressful. It is therefore understandable that many individuals make mistakes during the divorce process which they may come to regret. Not only can missteps impact your personal relationships, but they may also… Continue Reading

The National Economy and Divorce

It may come as no surprise, but divorce can be a costly endeavor. Since 2000, data collected by the U.S. Census Bureau has shown a dramatic correlation between the health of the national economy and the national divorce rate. Researchers have many theories as to why these two go hand in hand, but it primarily boils down to economic… Continue Reading

When Can my Alimony Agreement be Terminated?

After a divorce, many former spouses enter into some form of alimony agreement. Alimony is determined based on a litany of factors, but has no hard and fast rules which govern set amounts. Similarly, how and when to terminate alimony agreements is a legal grey area, with a number of considerations coming into play. Today, our divorce and… Continue Reading

Fox News Host to Divorce After Workplace Affair

Fox News host Jesse Watters has been served divorce papers after entering into an adulterous relationship with a co-worker. Noelle Watters, Jesse’s wife, filed for divorce this past October after learning about the extramarital affair. Jesse Watters is a regular on Fox News on his own show Watters’ World and as a guest on The Spin Stops Here Tour 2017 alongside… Continue Reading

Cohabitation; Post-Divorce Modifications and Agreements

Increasingly, adults are choosing to enter into “marital-style” relationships while remaining legally unmarried. This kind of relationship is referred to legally as “cohabitation”, and cohabitation can have a number of implications to existing divorce agreements such as alimony and child support. These implications come in the form of post-divorce modifications, specifically in the way that… Continue Reading

The Benefits of Having a Prenuptial Agreement

Prenuptial agreements often carry a somewhat negative connotation amongst newlyweds or couples soon to be married. Many of these people believe that by signing a prenuptial agreement, or even discussing one, you are saying you believe your marriage will eventually fail and result in a divorce. The truth of the matter however, is that prenuptial agreements… Continue Reading

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