Businesses
Depending on how a small business is set up, it may or may not be affected by the divorce proceedings. If the business is either partially or completely community property, its assets and value can go into the divorce settlement. Because this notion can be vague at times, it is often misunderstood by the beliefs held by either one or both spouses.
California community property law states that all efforts made during marriage are considered community property. For example, if the husband is a hobby painter and creates pieces to be sold during the course of the marriage, the profits should technically be evenly split between the couple. In this case, the painting of the pictures falls under the community property category because the efforts were made during the marriage.
Owning small businesses adds another level of complication to divorce proceedings. Depending on the intricacy involved with ownership stakes, a thorough and lengthy analysis may be required to determine the true numbers behind assets, ownership, value, and revenues. Final values for support and distribution may weigh heavily on these factors, and creating a fair settlement requires complete and honest information from both parties. It is highly recommended for all small business owners to have good records as a measure of protection and information transparency in the event of a divorce.
Moschetti Family Law can help you through this difficult time. We are committed to helping individuals with the transition and ensuring they have the fair and equitable resolution. If you have any questions, please contact us for help in understanding how California's laws pertain to your property. Call us at
Articles
The Valuation of a Professional Practice in a Divorce Proceeding
Cases
Pereira v. Pereira (1909) 156 Cal. 1
Van Camp v. Van Camp (1921) 53 Cal.App. 17
In re Marriage of Cream 13 Cal.App.4th 81
