Owning a business can bring you financial security and sustainability. When you divorce, that security and stability is put at risk.
As a community property state, California requires all assets or property acquired during the marriage with funds and efforts from the marital community be divided equally in divorce.
A business you own during a marriage doesn’t have to be community property. If it was purchased prior to marriage with separate funds and you have contributed no funds or efforts to it during the marriage, the earnings and value of the business would be separate property. If you contributed community funds and efforts during the marriage to the business, the earnings and value may be community property or a mix of community and separate property.
Consult with an experienced Los Angeles family law attorney if you have a business. Determining who is entitled to what share of a business can be complex and may require special analysis. How the business was purchased or built and what efforts you or your spouses have contributed will all need to be taken into consideration. If your business is community property or a mix of community and separate property, the portion that is community property will need to be divided. This doesn’t necessarily mean you have to sell your business to split the proceeds or let your spouse keep a percentage share of the business.
Property division in divorce is a series of checks and balances that seek to divide equally all the assets and liabilities from the marriage. You can trade shares or rights to property your spouse has for their shares or rights to your business to equal things out. You can also assume more liabilities or debts in exchange for your spouse’s share of your business.
You also have the option to continue to co-own the business after divorce if your spouse has a significant role in the business operation. In any case, divorces involving business ownership can be complex so be sure to consult an experienced family law attorney if you have any questions about how to protect your business during divorce.
Are you in the Los Angeles area and are concerned about protecting your business? Certified Family Law Specialist Mark H. Karney has experience handling complex divorces involving business ownership in Los Angeles County.
Attorney Mark H. Karney can work tenaciously to protect your business interests during a divorce and going forward. Call our Los Angeles office at (310) 393-0236; email us at firstname.lastname@example.org or contact us through our online form to schedule your free consultation with one of Los Angeles’s premier family law attorneys.Related Posts: When is a Business Separate Property? | When is a Business Community Property? |