Divorce can raise challenging questions about dividing marital assets, especially when a business is involved. Whether you started your business before getting married or built it together with your spouse, understanding how the courts handle business assets is crucial to protecting your financial future. At Kendall Gkikas & Mitchell, LLP, we’re here to help you navigate these complexities as your trusted divorce lawyer in Fontana CA. Keep reading for what you need to know about what happens to your business in a divorce.
Community Property vs. Separate Property
California is a community property state, which means that assets and debts acquired during the marriage are typically divided equally between spouses in a divorce. However, not all property is considered community property. Businesses can fall into one of two categories:
- Community Property: If your business was started during the marriage or significantly grew due to marital efforts or funds, it is likely considered community property. In this case, your spouse may be entitled to a share of its value.
- Separate Property: If your business was started before the marriage and has remained separate from marital finances, it may be classified as separate property. However, if marital resources or efforts contributed to its growth, your spouse might still have a claim to part of its value.
Determining whether your business is community or separate property is a critical first step, and a knowledgeable divorce lawyer in Fontana CA can help clarify this for you.
Valuing the Business
Once the court determines that your business is subject to division, it must be valued. Accurately assessing the value of a business can be complex and typically requires the assistance of a professional appraiser. The valuation process considers several factors, including:
- The business’s assets and liabilities
- Revenue and profits
- Market conditions
- The business’s goodwill (intangible value, such as reputation and customer loyalty)
Having a precise valuation ensures that both parties receive a fair distribution of assets. However, you will need the help of a divorce lawyer in Fontana CA, and maybe even some outside experts, to assist with valuing the business.
How Courts Handle Business Assets in Divorce
The court will aim to divide community property equitably, which doesn’t necessarily mean splitting the business itself. Here are some common ways courts handle business assets in a divorce:
- Buyout of the Spouse’s Share
- Selling the Business
- Co-Ownership
Contact Kendall Gkikas & Mitchell, LLP for Expert Divorce Assistance
At Kendall Gkikas & Mitchell, LLP, we understand the financial and emotional stakes involved in dividing business assets during a divorce. With 31 years of experience in family law and asset protection, we’ll work tirelessly to protect your interests and help you achieve a fair resolution. If you’re facing divorce and have concerns about what will happen to your business, contact us today at 909-482-1422 to schedule a consultation with an experienced divorce lawyer in Fontana CA. We’ll guide you through the process, protect your assets, and ensure your financial future is secure!