Divorce and Complexities of Cross-State Business Ownership

Dividing assets during a divorce can be a complex process, and it becomes even more intricate when cross-state business ownership is involved. For couples living in Pennsylvania or New Jersey, navigating the division of business assets requires understanding business valuations and how to protect sensitive information. If you are separating and your marriage includes cross-state business ownership, connect with a Bucks County family attorney.

A General Overview of Dividing Business Assets

When a marriage ends, Pennsylvania courts follow an equitable distribution model, where they consider factors like the length of the marriage, each spouse’s contribution to the marriage (financial or otherwise), and the economic circumstances of both parties. In New Jersey, the law is similar, but there is more emphasis on a just and fair division of assets.

If you or your spouse operate a business in both Pennsylvania and New Jersey, you are dealing with not one, but two different sets of state laws and legal frameworks. Here are some unique considerations when it comes to managing cross-state marital assets in the context of business ownership:

• Business valuation. Factors like market conditions, state-specific regulations, and the business’s physical presence in each state need to be considered for a proper valuation to be put in place A business valuation expert may be needed to assess the worth of the business, including tangible and intangible assets, intellectual property, and goodwill.
• Ownership stakes. If the business is jointly owned or if both spouses contribute to the growth of the business, determining the ownership stake each party has becomes crucial. In Pennsylvania, if one spouse started the business before the marriage, the appreciation in value since the marriage may still be considered marital property. In New Jersey, similar principles apply, but ownership interests in the business may be more directly impacted by how the business is run in each state.
• Protecting confidential information. Another concern when dividing business assets is ensuring that confidential business information, including trade secrets, client data, and financial records, remains protected. Legal strategies to protect such information include non-disclosure agreements and ensuring the data is appropriately handled during the division process.
• Tax implications. The division of business assets can also have significant tax consequences. Depending on the structure of the business, transferring ownership or selling portions of the business may result in capital gains taxes, state taxes, and other financial obligations.

Given the complexities involved in dividing business assets across state lines, having an experienced family lawyer is essential.

Coordinating with Experts and Understanding State Law

Legal teams can work with business valuation professionals, accountants, and tax experts to ensure a fair division. Plus, with knowledge of Pennsylvania and New Jersey law, your Bucks County family attorney can advocate for your best interests while adhering to the specific requirements of each state.

How are you and your soon-to-be-ex spouse handling the division of a shared business? Contact the legal team at Kevin L. Hand, P.C. to discuss your case and ensure that your interests are properly protected during the divorce process. Call 215-968-6602 for a confidential consultation.