Owning a business can be a source of pride for an individual in California. However, it can quickly become a source of heartache if that person decides to get divorced. A couple of tips can help divorcing individuals to protect their business interests while tackling contentious issues such as property division.
If a business owner’s spouse plays an active role in the family business, it is worth noting that the spouse can make a stronger case for having an interest in this business as well as its profits. The same is true if the spouse has been working for the company for a long period of time. Therefore, prior to getting divorced, the business owner may benefit from easing the spouse out as soon as possible.
Divorce courts constantly analyze whether or not a person’s separate property has turned into marital property through the co-mingling of marital and separate assets. This is why it is essential that people who own businesses make it clear that their businesses are their employers. Then, it is wise to keep all finances related to the business separate from personal finances.
Figuring out what will happen to one’s business during the divorce process can be tricky from a legal standpoint. However, an applied understanding of laws related to property division in California may increase a person’s chances of protecting his or her business and other assets during the divorce. Both parties have the right to fight for their best interests when it comes to the splitting of assets in a divorce.
Source: bizjournals.com, “How to protect your business in a divorce”, Patrick Yeatts, March 31, 2015