When you and your spouse divorce, understanding what you are entitled to during the dissolution of your marriage is vital. This is even more imperative if your spouse owns a business, as you may be eligible to receive a portion of the company during your divorce. However, receiving a portion of a spouse’s business is often a highly contested matter, so ensuring you take the necessary steps to get the asset you deserve is vital. If you and your spouse are going through a divorce, a Los Angeles business divorce attorney can help you navigate this complex process to ensure you receive the assets you are entitled to during the dissolution of your marriage.
Will I Get a Portion of My Spouse’s Business After a Divorce?
California follows the community property method of distributing property. As such, all assets acquired during your marriage are subject to equal distribution or a 50-50 split of assets. This includes your spouse’s business if the business was established during your union. If the business was established before marriage, it would be deemed your spouse’s separate property.
However, it is vital to understand that there are additional factors that the courts will consider before determining whether a spouse’s business is deemed desperate property. For example, if your spouse took funds from a shared account to fund business expenses, they have co-mingled the assets. As such, the courts will likely determine it community property.
If your spouse’s business is separate property, it’s essential to understand that you may still be entitled to the appreciation in value the company incurred. The courts will use one of two methods to divide the business appreciation based on the circumstances surrounding the case.
How Is a Business Valued During a Divorce?
Determining the value of a business can be a complex and confusing process, so it’s vital to enlist the assistance of an experienced attorney to guide you through this process. Business valuations can also be points of contention, as the spouse who owns the business will likely undervalue its worth to protect themself.
However, with the help of an attorney experienced in complex issues like business valuations, they will examine all assets, liabilities, debts, inventory, and other elements to determine how much the business is worth.
In some instances, a spouse may offer to buy out the other, if they are able to reach an agreement. It’s important to note that if you agree to sell your share to your ex, you are no longer eligible for new assets that come in.
When you need assistance navigating this complex legal process, the Zitser Family Law Group is ready to help. Our legal team has the necessary experience to help you navigate the complexities of this matter. Contact us today to learn how we will fight for the assets you deserve during your divorce.
