On paper, an equal 50% business partnership with your spouse looks uncomplicated. It may seem that each person should simply walk away with half of its value after a divorce. But dividing a business is hardly that simple. The company may provide one spouse’s primary income, rely on the other spouse’s work behind the scenes or represent years of investment by both.
In New Hampshire, an equal ownership interest does not necessarily determine how the business will factor into the overall property division. The court may review the overall financial picture of the marriage and each spouse’s property.
How does New Hampshire divide a jointly owned business?
For property division purposes, New Hampshire may consider assets held by either spouse, including physical and nonphysical property. A business interest may therefore become part of the property subject to division in a divorce.
The court may consider factors such as the length of the marriage, each spouse’s financial and nonfinancial contributions, income, separate property and the growth or decline in the value of the business. A business that one spouse owned before marriage may also require a different analysis than one the couple built during the marriage.
What could happen to the business?
An equal ownership interest does not necessarily mean the spouses must sell the company or split its physical assets. Depending on the circumstances, several outcomes may be possible:
- One spouse keeps the business: One spouse may retain the company while compensating the other for an appropriate share of its value.
- The spouses sell the business: A sale may provide a way to divide the proceeds when neither spouse can reasonably retain the company.
- The spouses continue as owners: In some situations, the parties may agree to maintain their shared ownership after the divorce.
The right approach can depend on the business, the spouses’ financial situation and the overall property division.
Looking beyond the ownership percentage
For spouses who built a company together, divorce can force difficult decisions about both the business and their financial futures. Understanding how the business fits into the larger property division can help clarify what options may exist.
A New Hampshire divorce attorney can review the business, the marital estate and the circumstances of the marriage to help determine an appropriate approach to property division.
