Divorce for Business Owners: The Why?

         “Entrepreneurs must be willing to be misunderstood for long periods of time.” – Jeff Bezos, CEO and Founder of Amazon and Divorcee 

         Many studies suggest that there is a 10% higher risk of divorce for business owners than for W-2 employees.  For those of us that own businesses (or are married to an entrepreneur), this number is probably quite shocking.  Indeed, how is it not higher?  Long hours, high-stress, business trips, sporadic cash-flow, and sweat equity---all time away from our families working to build a better future but sometimes neglecting the present. 

            And then there is the passion.  For us it’s often a great passion building our businesses; but for our spouses there was probably that moment early on when talking about how many widgets we sold (or clients we served) became just a bit less exciting.  As entrepreneurs, big or small, we have to juggle the money, be creative, have all or at least most of the answers, be therapists to our employees, and hopefully be home in time for dinner.  Most marriages do not come to a natural end because of a blow-out argument, instead the foundation of the marriage is slowly chipped away and eroded over years—and all with the best of intentions.

            Still, divorce is a complex and not easily reversed procedure.  For that reason I encourage most of our clients to seek marriage counseling (and/or individual therapy) prior to filing for divorce.  At our firm we find that this has an advantage even if the marriage cannot be saved because at the very least it helps both parties process the end of the marriage.  Emotion is natural and has to be addressed--better to do it in a safe place with a therapist than in a courtroom when both sides are paying hundreds of dollars an hour for lawyers (not to mention forensic accountants or other experts required to successfully litigate divorces involving business owners). 

Divorce for Business Owners Versus W-2 Wage Earners 

Us business owners tend to be a little bit different from our W-2 employee counterparts, and that difference not only creates an additional risk of divorce, but it also changes the landscape of a divorce in many ways.  Indeed, divorce for business owners in New Jersey is an often complex undertaking.  

For W-2 employees it is often easy to ascertain their salary---it's right there in the actual W-2's.  Conversely, for a business owner there is not only the issue of how much their business is worth (e.g. the equity of the business); but also how much income the business owner should be imputed each year.  A business owner facing a divorce could increase costs to reduce a potential alimony claim from their spouse, for instance.  Thus it is not uncommon for business owner's confronting a divorce (or their spouses) to become embroiled in more expensive divorce litigation involving accountants or other experts.  These types of trials are often difficult for attorneys, judges, and the parties themselves as it is difficult to ascertain a baseline for equity and income. 

Also, many business owners are "serial entrepeneurs," with many different  business interests.  It is very important for appropriate discovery to be conducted in these types of cases to ensure that everything is disclosed that needs to be disclosed. 

If you'd like to learn more about our firm and our experience representing local business owners facing a New Jersey divorce, then please call 908-237-3096 to schedule a consultation.  As a fellow business owner I understand the unique positives and negatives of business ownership and its impact on our family life. 





Carl Taylor
Flemington, New Jersey Divorce Lawyer. To Learn More Call 908-237-3096
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