How to Divide Business Assets During a Divorce

21.11.16

How to Divide Business Assets During a Divorce

Posted By Flicker, Kerin, Kruger & Bissada LLP

Dividing a business during a divorce is often a complicated task because so many variables come into play. As with other assets in the state of California, a business is considered in the valuation and division of community property. Community property is defined as assets acquired or income earned by either spouse during marriage. Separate property is defined as assets acquired prior to the marriage, gifts inherited or received during the marriage, or items and money earned after separation. Anything considered community property must be equally divided among both parties in the absence of any written agreements that state otherwise.

When determining if a business is separate or community property, several questions must be answered, for example:

  • What is the date of marriage?
  • When was the business created?
  • What is the source of funds for the business?
  • Was there any spousal contribution to the business?
  • What was the value of the business at the time of your divorce?

If you determine that the business is community property or a mix of both separate property and community property, there are a variety of routes you may be able to take.

  • Both you and your ex-spouse can continue to jointly own the business.
  • You can sell the business and divide the profits.
  • One spouse can keep the business and offset half the value with other assets.

One of the more time intensive aspects of dividing business assets is determining the value of the business. This involves the intangible value, known as its evaluation of “goodwill”, which is based on the expectations of the business’s future. A certified public accountant and/or business appraiser are necessary to review the business’s books and examine its records.

Flicker, Kerin, Kruger & Bissada LLP helps clients protect their interests and assets when property is divided or distributed during the divorce process. This is typically a stressful and emotionally charged time for both parties. You will need a firm that has expertise in carefully handling such cases. Our attorneys are skilled negotiators and will help make this step less daunting during your divorce.

Call our Menlo Park location at (650) 289-1400 or our San Ramon location at (925) 327-6200.

Categories: Family Law
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