Business Owner’s Divorce Lawyer
Protecting What You’ve Worked So Hard to Build
When you own a business, you invest more than just money into your enterprise. You put in time, effort, and a lot of your own personality. Your business is a reflection of you, and it becomes part of your identity.
All that is put at risk during a divorce, which is one reason the process can be so unnerving. Working with experienced divorce attorneys who know the right strategies to protect your interests is one way to ease the uncertainty and gain a sense of control.
At Holstrom, Block & Park, APLC, we understand all the complex factors that can impact both the business and the business owner during divorce. We work with a team of experts to protect the value of your business and ensure you receive the right share of assets and that you emerge from the process prepared to move forward to a better life ahead.
A Plan for Succession
If your enterprise has some business succession mechanisms in place, those may affect what happens to your business during the divorce. Similarly, if you executed a pre- or postmarital agreement, the terms of the agreement might specify that business interests remain the property of one spouse or the degree to which business interests will be treated as marital property.
Even if there are no plans in place now, it is still not too late to create plans to ensure the continued success of the business in the future. If your spouse has been working in the business, you’ll need to assess whether you want that spouse to have any continued involvement, and if not, how you replace those labor contributions. You will need to set up procedures to ensure stability in operation so that the business continues to remain viable. This can often require intricate financial maneuvers because certain assets may be frozen during the divorce process. Our team can guide you through and protect the profitability of your business.
Community or Separate Property?
Most people in California are aware that we live in a community property state and that property owned jointly by both spouses is divided equally in divorce, unless you have a marital agreement that specifies otherwise. The question is whether particular assets—including your business—should be considered marital property or separate property. Assets treated as separate property are not divided but remain with the individual spouse to whom they belong.
Assets you receive as an inheritance are usually separate property, and so are assets you owned before marriage. However, there’s a catch—if you commingle your separate property with marital property or if your spouse contributes to the value, or even if it just increases in value during the marriage—at least part of that separate property can be divided as community property. Deciding what is what can be a very complicated process, which is one reason it helps to have attorneys with in-depth experience working on your behalf.
The bottom line is that if you started your business during the marriage, it will be treated as community property and the value will be divided in divorce. If you started the business before you got married, some of the value of that business may still be treated as community property. Your lawyer should be prepared to show how much of the value can be attributed to your actions before marriage to ensure you receive a fair allocation of assets.
Dividing Business Interests in Divorce
You have a variety of options when it comes to handling a business in divorce. Often the easiest approach is to sell the business and divide the proceeds. However, this may not be practical or appealing, and even then, you need to ensure that the business sale gets the right value and is handled appropriately.
Many business owners who divorce opt to buy out their spouse’s interests. This can be accomplished with assets on hand or a payment plan based on future business revenues, or other options. We review the ramifications with you so that you can choose the approach that makes the most sense for your situation. We also know when to bring in experts in business valuation and succession to ensure these critical issues are addressed with the care they require. Dividing business interests is not simple in any scenario, but we know how to protect you.
Work with a Team That Understands How to Handle a Business in Divorce
At Holstrom, Block & Parke, our team of Certified Family Law Specialists and associates know that owning a business can affect everything in divorce, including alimony and child support. We work to ensure that your business assets are not unfairly treated as personal income to inflate your support obligations.
We recognize the potential problem areas and develop tactical plans to address concerns at the outset before conflicts and difficulties arise. Trust our experienced team to protect your business and your personal interests at all phases of the process. For a confidential consultation to learn more about the ways we can assist, contact our team now.