No one enters a marriage expecting it to end. Further, most people do not plan for their marriage to end, including what happens to their house, retirement or their business. As divorce attorneys, we often see a scenario such as this: During the marriage, one spouse expresses an interest in starting up a business. Both parties know there are risks and money involved, but they support one another to start the business. One spouse may focus his or her time principally on the business, while the other spouse maintains the household and primarily cares for the children. At some point, the parties find themselves in marital turmoil, and eventually one files for divorce. So what happens to the business?
Pennsylvania is clear that any marital property, which is property acquired during the marriage, is subject to equitable distribution through the divorce. The courts apply the factors set forth in 23 Pa. C.S.A. Section 3502(a) in making an equitable distribution division. Some business owners enter a marriage with a business already intact. This makes the business a premarital asset and therefore separate property not subject to division in the divorce. However, any increase in value of that business throughout the marriage is subject to equitable distribution.
Protecting Assets by Agreement
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