Q. How do I Protect My business in a Divorce?
A. If you are considering filing for a divorce but you are concerned about your business,
you need to speak with a California family law firm before you file any paperwork. If you are the primary owner of the business and your spouse has been completely separate from any business proceedings, you should be able to protect your business as you go through the process of a divorce.
Property Division during a Divorce in California
Property is considered separate property, community property, or a combination of the two. Each party retains their separate property, community property is divided equally, and property that is deemed a combination of the two is divided equitably. If you have been running a business that you started prior to your marriage, you should be able to retain full control of the business once your marriage has been dissolved.
The Easiest Resolution May Be a Buyout of the Other Party
If you are concerned about business ownership and divorce proceedings, the easiest way to resolve your differences is to agree to a buyout of the other party. If the process of divorce is having a negative effect on your business, it is time to come to a reasonable agreement so that you can focus on running the business. If a buyout isn’t possible, you should consider offering a percentage of the revenue stream until a buyout of the partner’s stake in the business is possible.
Gather Evidence that You are the Primary Business Owner
If you have been the one to work the business, if it was your ideas and capital that started the business, you need to gather this proof. If your primary goal is to continue to run the business, you need to prove that the business would not have existed without your time, talent, and money. While your former spouse may be entitled to financial compensation, it will be in your best interest to retain control over a successful business. You have worked hard to build up your business, and you should be the one that continues to reap the benefits of your hard work.
When you are ready to file for a divorce and you are concerned about your business, it’s time to sit down with an experienced family law attorney to discuss your options. You can retain control of your business as long as you were the one running the business in the first place. If your former spouse wants control of the business, you will need the power of an experienced lawyer behind you.
California – Community Property is Divide Equally
In California, community property is divided equally. Establishing that your business is community property will be the first goal of your former spouse. If you can prove that the business is at least partially separate property, the asset will not be divided equally.
Your business will need to be valuated by a qualified resource that will come in and look at all of your business records. Your business assets and liabilities will be established, and any value in your business is subject to division between you and your former spouse. Getting your business qualified as separate property or at least partial separate property is the best way for you to secure control of your business over time.