Business ownership is a thing of accomplishment. If you own a business, you may have spent years of hard work and sacrifice to be able to either build it from the ground up or purchase it. Determining whether it is property of the community or not will depend on when you acquired your current interest in it, with what funds and through which efforts.
The basic principle is that whatever interest you had in the business prior to marriage is separate property, which you are entitled to upon divorce. If you bought the business with separate funds and have not been a participatory holder of it during the marriage, in other words, you have invested no fruits of your labor or efforts into the business, then the business value does not reflect community funds or community efforts.
What income you earn on your initial business investment would be separate property as well, as long as the marital community has no active role in the business’s operation or success. If your business was bought with separate funds but was rendered profitable during your marriage, with the implied support of your spouse, you would be entitled to those funds used to purchase the business, but not the entire value. If you were gifted or inherited a business and again, do not contribute any community funds or efforts to it during the marriage, it would be separate property because the marital community had no influence on its value.
Closely held businesses, as opposed to publicly traded companies with a clear market value, are more difficult to value and divide in a divorce. If you do own a business, consult a Los Angeles family law attorney with experience in handling complex property division issues. He or she will be able to call on the right resources to valuate your business and determine if it is separate, community or mixed separate and community property.
If you own a business and are concerned about protecting your assets, a legal team with experience handling high net-worth and high asset individuals can ensure you take the right steps to properly assess the value and property designation of your business.
Are you in Los Angeles County and have questions about business ownership and property division? Certified Family Law Specialist Mark H. Karney has expertise in child support matters and experience handling complex divorce cases involving business ownership in Los Angeles County. Serving Los Angeles and surrounding areas, Mark H. Karney can efficiently and successfully handle your property division. Contact our office today to schedule a free consultation to discuss your case. Contact us through our online form or call us at 310-622-9434.