Is my wife entitled to half my business if we divorce?

Written by Yonatan Levoritz on May 6, 2025

Is my wife entitled to half my business if we divorce? This is one of the most pressing and emotionally charged questions high-net-worth individuals in NYC face when navigating a separation. Divorce is never easy, but when a business is involved—especially one that you’ve built from the ground up—the stakes are even higher. In New York, the answer depends on a complex web of legal standards, business valuations, and individual circumstances. Was the business started before or after the marriage? Did marital funds contribute to its growth? Did your spouse play a role in operations? These details matter. Property division in NYC divorces, particularly those involving business interests, is far from straightforward. That’s why having an experienced legal team is essential.

At The Levoritz Law Firm , we specialize in helping entrepreneurs and business owners protect what they’ve built while navigating the divorce process with confidence and clarity.

Understanding the divorce process in New York

Divorce in New York follows an equitable distribution model, which means marital assets are divided fairly, though not always equally. This doesn’t imply a 50/50 split across the board; instead, courts aim to reach a division that reflects each spouse’s contributions and financial circumstances. The legal process begins when one spouse files a petition for divorce and serves the other. Once proceedings are underway, the court must take inventory of all marital property, including real estate, savings, investments, and debts. Businesses, especially those with significant value or complex ownership structures, are among the most challenging assets to assess and divide.

Importantly, equitable distribution applies only to marital property, which generally includes assets acquired during the marriage. Separate property—such as inheritances, gifts from third parties, or pre-marital holdings—typically remains with the original owner. However, these boundaries can blur. If a business was launched before the marriage but expanded using marital funds or if both spouses contributed labor or strategy, then a portion of that business’s value may be considered marital. This could also apply if the business appreciated in value during the marriage due to joint efforts or financial support. Courts will look at these details carefully before determining how the business should be handled. In high-asset cases, forensic accountants and valuation experts are often brought in to ensure the fairest outcome possible.

How is a business treated in a Divorce?

Businesses are considered assets during divorce proceedings and may be classified as marital, separate, or a blend of both. The court will first determine whether the business was founded before or during the marriage, and then evaluate how it has changed or grown throughout the relationship. This distinction plays a significant role in whether the business, or a share of its value, becomes subject to division.

To make an accurate determination, courts often require the following:

• A professional and independent valuation of the business.
• Tax returns and financial records indicating profits, losses, and liabilities.
• Documentation of each spouse’s involvement, including managerial duties or financial investments.

The legal structure of your company can also affect how the business is treated:

• Sole Proprietorships are typically the most straightforward to evaluate and divide.
• LLCs and Partnerships may require a review of member agreements or investor rights.
• Corporations often involve additional rules or bylaws regarding stock transfers and shareholder protections.

Valuation typically includes tangible assets, earnings history, and intangible factors like goodwill, both business-related and personal. Disagreements about valuation and division are common in high-asset divorces, where one spouse may dispute the estimated worth or seek a larger share. For business owners, protecting the integrity and future of the company often becomes a top priority during divorce negotiations.

Factors that influence business division in a divorce

Several factors determine how—and whether—your business is divided during a divorce in NYC. Courts evaluate a range of legal and financial variables before deciding if a business interest should be divided, and to what extent. Key factors include:

• When the business was founded (whether it was established before or during the marriage).
• Whether marital funds or shared labor were used to support or grow the business.
• The nature and extent of each spouse’s involvement, including financial backing, strategic input, or day-to-day management.
• The existence of pre- or postnuptial agreements that may specify how the business is treated in the event of divorce.
• The valuation method accepted by the court may vary depending on the business type and industry.

Courts in New York operate under the Equitable Distribution Law, which means that property is divided in a manner considered fair, not necessarily equal.

So, is your wife entitled to half your business if you divorce?

Not automatically. If your business is deemed marital property, she may be entitled to a share of its value, but this doesn’t guarantee a 50% interest. Courts often balance the distribution using other marital assets instead of dividing or transferring business ownership outright. This helps preserve operational control for the owner while achieving an equitable outcome.

Protect your business in the event of a divorce

The best protection begins long before a divorce is on the table. If you’re a business owner, here are key strategies to shield your company:

• • Prenuptial or postnuptial agreements clearly outlining business ownership
  • Operating agreements that define ownership interests
  • Buy-sell agreements restricting transfers of business shares

• Keeping business and personal finances separate
• Avoiding joint use of marital funds for business expenses

Even if divorce is already underway, proactive steps—like obtaining a credible valuation or negotiating a buyout—can help preserve your company.

How a Manhattan Divorce Attorney Can Help You

In high-asset divorces, particularly those involving closely held businesses or professional practices, skilled legal representation is critical. We know how to uncover hidden risks and negotiate aggressively on your behalf.

A divorce lawyer can assist with:

• Business valuation and forensic accounting
• Drafting and enforcing marital agreements
• Strategic settlement negotiations
• Litigation, if necessary

With extensive experience in New York divorce law, we understand the intricacies that come with dividing complex assets.

The Levoritz Law Firm is the right choice for you

We have a strong history of dealing with high-net-worth divorces for the entrepreneurs, executives, and professionals in Manhattan at The Levoritz Law Firm. We know what’s at stake and fight like hell to defend it. Don’t put your business at risk.