Dividing assets during a divorce in New York gets complex, especially when a business is involved. Courts aim for equitable distribution, but figuring out the business’s worth is key to fairness. This process isn’t always simple, and several factors come into play.
Understanding the valuation process
New York courts often use financial experts to determine a business’s value. Specifically, Certified Public Accountants (CPAs), Certified Valuation Analysts (CVAs), and business appraisers are frequently utilized. These professionals examine assets, debts, and potential earnings. They may employ methods like analyzing comparable business sales or calculating the present value of future profits. These techniques help establish a clear picture of the business’s financial health.
Factors that influence the valuation
The expert considers the business’s type, its market, and unique aspects. For example, a tech startup differs in valuation from a long-established retail store. The expert also examines the owner’s role. If the owner’s personal skills drive the business’s success, that gets factored into the valuation.
Courts also consider if the business’s growth happened during the marriage. The distinction between marital and separate property significantly alters the final valuation outcome. Premarital agreements, when present, substantially influence how business interests divide.
Dividing the business
Once the business is valued, the court decides how to divide it fairly. This might involve one spouse keeping the business and giving the other spouse other assets. Or, if possible, they may sell the business and divide the proceeds. New York law allows for many solutions. The goal remains equitable distribution.
This area of law can feel overwhelming. People facing this situation should seek information to understand how it affects their specific circumstances.
