Whether you and your soon-to-be ex-spouse need to divide business ownership for a business that either or both of you own depends on several factors. You should consult with a business owner’s divorce lawyer at our Southern California firm, Holstrom Divorce Authority.

Factors that could influence whether you and your spouse divide a business in your divorce include:

• When you acquired the business
• Who funded the business acquisition
• Who contributed to operations and maintenance of the business
• Whether you or your spouse commingled business and marital assets

Our divorce lawyers can help you understand if a court will enforce either your or your spouse’s claim to a business.

California considers any property acquired by either spouse during the marriage to be marital property, also called “community property.” If you owned property before the marriage, that property still belongs to you as separate property, unless you commingled separate and marital property.

For example, if one spouse owned a business prior to the marriage, the business is their separate property. If that spouse’s income comes from the business and they used business profits to purchase the marital home or real estate investment property in both spouses’ names, the court may determine that part of the business belongs to the other spouse due to commingling.

If either or both spouses funded the purchase of a business at any point during the marriage, the court would probably consider it marital property. However, the court would also consider each spouse’s contribution to the business, such as if one spouse spent significantly more time on business operations.

Our divorce attorneys can examine the details of your business and commingled assets to advise on dividing the business in your divorce.

California is a community property state, not an equitable distribution state. In community property states, the courts split marital assets evenly between the divorcing spouses. If a business becomes part of marital property, finding a fair solution could be difficult.

A business owner’s divorce lawyer with our firm can help you determine whether you followed the correct steps to maintain your claim as the sole owner of your business, including:

• Keeping records of all business investments
• Establishing yourself as the sole business owner
• Paying your spouse for their work as an employee
• Keeping all finances for the business and personal finances separate

If commingling occurred or your spouse contributed to the business as a part-time owner, we can help you determine what percent contribution your spouse made to your business success. A judge might allow you to buy out your spouse’s share of the business to retain ownership.

Divorcing in California when you own a business is a complex legal procedure. If you believe a court might consider your business marital property, you need a divorce attorney experienced in dividing business assets. Call us at Holstrom Divorce Authority today at (844) 237-5791 or contact us online to schedule a consultation with a business owner’s divorce lawyer in Southern California.