Dividing Business Ventures
Division of property during a divorce often is a messy and stressful process. Wondering what assets will remain under whose ownership can cause anxiety and worry. That worry can be amplified if a joint-owned business is involved in the divorce. How do these types of assets get divided?
California Community Property Law
California is a community property state, meaning that all assets acquired during the marriage will be divided and each partner will be entitled to half. Anything acquired previous to the marriage is considered separate property and will not be divided during the divorce.
This community property law applies to a jointly owned business or any other jointly owned property. In order to divide such ventures, the business must be accurately valued before being divided.
If a business was started or acquired prior to marriage and the spouse has no involvement in it, then that business is considered separate property and will not be divided during the divorce.
After a business has been valued, the next step is determining ownership. This can seem tricky. Factors to consider in determining business ownership include which spouse runs the business and how much involvement the other spouse has in the business. If the spouse is on the signed registration documents or if the spouse is employed by the business, then the court can easily determine that there is some level of involvement.
The person who considers himself or herself the primary business owner should gather as much evidence as possible to present to the court in defense of ownership. A skilled attorney should also get involved to argue for ownership in court.
Like other property divisions, dividing a jointly owned business can occur successfully prior to a trial hearing. Through mediation sessions or through agreements between the spouses, a business can be divided without having to go to court.
If a person is truly concerned about business ownership post-divorce, he or she could also consider presenting the other spouse with a buyout to remain in sole control of the business.
Speak With An Attorney
If you and your spouse own a business or other forms of jointly owned property and are concerned about what will happen to those assets, put your mind at ease by contacting Feinberg & Waller, APC and speaking with a professional who can help you determine the best course of action.
Call us today at (844) 252-1140 or fill out our contact form online to schedule a consultation.