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What fraction of a company’s value is marital property?

On Behalf of | Oct 12, 2023 | Property division

Married individuals considering divorce are compelled to think about what the end of their marriage means for their finances. Some couples have prenuptial agreements that clearly define how they will share their property. Others will need to negotiate with their spouse or prepare to present their case to a family law judge.

Any property that people acquire during their marriages is usually subject to division, and spouses often (understandably) disagree about how much they should share and how to divide those assets. If one party or both parties own a business, it may serve as a source of major conflict.

How much of the business will be at risk in a divorce?

The business might be partially or wholly marital property

If one spouse owned the business outright before marriage, they might be able to claim that it was their separate property. However, they will very likely have made investments in the company using marital resources, which means that at least part of the company’s value is marital property.

If someone started the business during the marriage, then it would be more likely that the company’s value will likely be subject to division. The use of marital resources and the work of both spouses to develop the business can lead to claims that the business is marital property.

Many couples preparing for divorce with high-value assets like businesses may choose to work toward uncontested divorces. That way, they will have control over their ultimate property division terms. Figuring out what a company is worth and how much of its value is marital property is an important starting point for negotiations during a complex divorce and seeking legal guidance is a good way to start.