If you own a business in New York and you are heading toward divorce, one of your biggest worries is probably how to keep that company out of the financial split.
Under New York’s equitable distribution rules, your spouse can claim part of the business, even if you started it before the marriage. But you’re not stuck. With the right steps, you can limit what gets divided. Here are three smart ways to protect what you’ve worked hard to build.
Draft a prenup or postnup that defines ownership
You don’t need to be rich to use a prenup or postnup to your advantage. If you own a business, it’s one of the most effective tools to protect your future. These agreements let you decide in advance how the company plays into a divorce, including whether its value counts toward marital assets, whether appreciation matters and what happens to profits.
Courts in New York respect these contracts when both parties sign them properly and negotiate them fairly. Even if you are already married, you can still create a postnup that draws that legal boundary before any tension turns into paperwork.
Set up your business to stay separate
When you blur the lines between your personal and business finances, you hand your spouse more ways to argue for a share in court. Instead, open a dedicated business account, pay yourself a salary and keep household expenses out of your company’s books. Leave your spouse off the company paperwork — don’t list them as a shareholder, officer or informal partner, unless you want them to have a claim later.
These small moves might not feel urgent now, but they carry serious weight when New York courts decide what counts as marital property.
Track growth and valuation over time
If you never tracked your business’s value, you can’t prove what’s yours. That’s why you need a paper trail showing what your business was worth before the marriage, how it grew and what decisions drove that growth.
Regular appraisals, updated financial statements and clean tax filings help tell a clear story of which parts of the company came from your separate effort. If you can show that growth came from you — not from your spouse’s support — you give yourself a better shot at keeping their claims off your business.
Protect your future while things are still calm
You don’t want to scramble for damage control after divorce papers land on your desk. If you run a business, protect it while things still feel stable — not once it’s already at risk. Whether you are married, planning to marry or starting to drift apart, take this as your sign to get clear on your options now, before a court pulls the company you built into a fight you didn’t see coming.
