How to Protect Your Family Business

Business owners know that there are many variables that need to be watched for and accounted for when creating and building the business.  Business owners need to make sure to do the right type of advertising, have an online presence, account for local competitors, and a variety of other issues when planning for the future of the business.  In some situations, this type of planning will also need to include accounting for the possibility of future or imminent divorce.

Before deciding the best way to protect your family business, you first need to determine whether the family business is marital or separate property.  Most times, any property received or created during marriage is marital property.  Therefore, if the family business is one that you and your spouse created and built together, then it is almost certainly marital property.  On the other hand, if your family business is one that was created by your parents or others of your relatives, it is may be separate property.  In New Jersey, marital property will be equitably divided in any divorce.  Therefore, if your family business is one that you created with your spouse, it is likely marital property, your spouse will be entitled to receive an equitable share of the value of the business when the divorce is concluded. 

If your business is one that was started by other relatives and you own a share of that business, there are steps that you should take to protect your interest in the family business.  One of the easiest ways to protect your family business or your interest in that business is to have a prenuptial agreement setting out that your spouse is not entitled to a share of that business in the event of divorce.  Prenuptial agreements have very specific requirements, and you should see an attorney to make sure the agreement is done properly so it will be enforceable. 

Another way to protect your interest in your family business is to keep your spouse from being involved in the family business.  If your business is separate property, commingling marital assets by investing marital funds into the business could muddy those waters.  In addition, if the spouse works for the business, especially for reduced or even no wages, he or she could argue that the business is now marital property, subject to division.

Family businesses are often of central importance to those who have poured years of effort and resources into the business. We have in helping our clients to protect their family business in divorce. Contact us today at 732-529-6937 to make an appointment to talk about your assets and your divorce. Please also check out our for other FAQs about divorce topics like this one. 

About the Author


John Nachlinger is a co-founder and managing attorney of Netsquire, a family law firm focused on streamlining divorces through effective mediation, settlement drafting, and court filing assistance. As a New Jersey Supreme Court Certified Matrimonial Law Attorney and Qualified Mediator, John guides couples toward equitable agreements without the cost and stress of litigation.

Recognized as a New Jersey Super Lawyer for over a decade, John’s client-focused approach aims to foster understanding during challenging transitions. With a background spanning top law journals, judicial clerkships, and boutique family law firms, John now applies his analytical skills to create workable solutions for all parties. His mediation services reshape the divorce journey by prioritizing compassion and compromise.

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