My partner has received a letter from his ex wife. They are two months from divorce being finalized and she has now

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Customer: Hi pearl. My partner has received a letter from his ex wife. They are two months from divorce being finalized and she has now decided she would like compensation for the time they were together. He owns a business and would like what she believes she is owed. Would she be entitled to anything past date of separation and if she is entitled to anything, is she not also responsible for any debt in the business at the time they were married?
JA: Hi. What steps has your partner taken? Have they filed any papers in family court?
Customer: His lawyer is currently away. Just trying to get a general idea on what could happen.
JA: Family law varies by state. What state are they in?
Customer: Tauranga.
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: Not that I can think of.
Answered by Chris The Lawyer in 7 mins 1 year ago
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Chris The Lawyer, Expert

Hi My name is ***** ***** I am a New Zealand lawyer based in Wellingtonwith more than 42 years of experience. I am here to help with your questions.

Customer
If she is entitled to compensation, is she also responsible for any debt the business had whilst they were together?
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Chris The Lawyer, Expert

Normally when a husband and wife separate, all relationship property is divided equally provided they have been together for more than three years. A business is usually relationship property but it can depend on the circumstances. Normally you would get a valuation of the business and offer a half share of what it is worth. The share of the business is taken at the time of separation, and the value is at the time of the settlement. If the business has debts, that will affect the value of the business so the debts are taken into account. All

Customer
Okay, so if the business is worth something now, she is entitled to that even though at time of separation the business was worth nothing?
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Chris The Lawyer, Expert

That is possible, but you may need to get some expert evidence. If the work to make the business worth something all happened after separation, there is an argument that she cannot get a share

Customer
The business is currently still in debt. Would she still be entitled to anything made financially after date of separation?
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Chris The Lawyer, Expert

The value of the business also includes taking debt into account. If the value of the business is exceeded by the debt it isnt worth anything

Customer
Is value of the business determined by profit?
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Chris The Lawyer, Expert

There are a number of ways of valuing the business. You can look at the assets and debts, or you can look at profit. If it isn't making a profit it may not be worth anything

Customer
Okay, if it were found to be worth something, is it 50/50 split regardless of no financial investment made by her? He also inherited the business from his father, however it was handed over directly not through a trust.
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Chris The Lawyer, Expert

It may be separate property if he had nothing to do with the business, although if the income was used for the family that would change

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