Riverside Divorce Attorneys Protecting Your Rights When There Is A Business Involved
Navigating a divorce while running a business can be particularly challenging for entrepreneurs in Riverside and Temecula. Suddenly, the future of your company – possibly your life’s work – feels uncertain. California’s community property laws can greatly affect your business ownership in these situations, making it crucial to have experienced legal support.
At Cullen Family Law Group, our attorneys have guided many business owners through the complexities of divorce. As Certified Family Law Specialists, we have the experience and knowledge necessary in cases that involve high-value assets. Our divorce lawyers are committed to helping you devise effective strategies that ensure your business continues to operate seamlessly while meeting all property division obligations.
Understanding Whether Your Business Is Community Or Separate Property
Whether your spouse can claim half of your business depends on factors such as:
- When you established your business
- How you managed its finances
- If there was a valid prenuptial agreement stating that your business was your separate property
If you started your business during marriage, courts will consider it as community property. This means your ex-spouse has rights to your business assets even if they weren’t directly involved in its operations. However, if you began the business before marriage, courts may categorize it as separate property. This makes it less likely to be subject to division.
However, note that if there are no clear financial and legal boundaries, businesses started before marriage might still be divided. For example, if your business grew in value during the marriage because of shared money or efforts, courts might see that growth as community property. Placing business income in joint accounts or using personal funds for business needs can also turn it into community property.
Professional Business Valuation: A Critical Step
It’s crucial to get an accurate valuation of all your property and assets during a divorce. If assets aren’t valued accurately, it’s difficult to ensure a fair division, especially with complex assets like businesses, real estate and investments.
The valuation of your business may be conducted in different ways:
- Market approach: Compares your business to similar ones recently sold to find its market value
- Income approach: Looks at your revenue and profit potential, estimating future earnings and converting them to present value
- Asset approach: Calculates net worth by adding up all assets and subtracting liabilities
It’s important to gather all financial documents and keep records of contributions made before marriage. Our divorce lawyers will help you find qualified business appraisers, question unfair valuations from your spouse and choose the most appropriate valuation method for your business and other assets.
Different Methods Of Dividing Your Business Strategically
There are ways to keep your company stable and protect your business interests while meeting property division requirements. Knowing these options can help you decide wisely about your business’s future:
- Buyout arrangement: One spouse keeps full ownership by paying the other for their share of the business value. Payments can be a lump sum or spread over time, using other marital assets to balance the business value. Our divorce attorneys can help negotiate terms that protect your interests while meeting legal obligations.
- Structured settlements: You and your attorney can propose a payment plan that might include profit-sharing for a set time, allowing the business to earn the money needed for the buyout. This helps keep business operations running while recognizing your spouse’s interest in the business value.
When typical buyouts are not possible, other arrangements might work. Co-ownership after divorce is an option if both can maintain a good professional relationship. Selling the business and sharing the proceeds offers a clean break but gives up future business potential. Another choice is to offset the business value with other major assets like retirement funds or real estate.
Secure Your Business’ Future: Contact Us Today
At Cullen Family Law Group, our goal is to achieve practical results that let you confidently advance in your personal and professional life. Our divorce lawyers understand that cases like these are not just financially stressful, but emotionally difficult as well. We are ready to hear your concerns, assess your situation and guide you through your options. Call 951-715-4632 or send us your questions using our online form.