Tips for divorcing entrepreneurs
Some married entrepreneurs might be afraid of divorcing their spouses because of the possibility that they will lose their businesses in the process. Although California is a community property state, which means that all assets acquired during a marriage are marital property, there are several steps that business owners could take to avoid losing their companies.
Just like starting a business, going through a divorce requires knowledge about the process and a plan to proceed. Divorcing entrepreneurs should identify their property and assets as well as determine how much they are worth. Having all of the necessary paperwork is just as important, including both personal and business affairs. Next, they need to decide if they want to keep operating their businesses following the divorce. Whether or not their spouses have a financial interest in their businesses may affect this decision, but they should really focus on what they want.
Divorcing entrepreneurs should not think that their spouses will automatically get half of their business assets. All marital assets are considered when property settlements are made. This means that they could keep all of their business assets but give up other community property such as the family home or investments. In the end, it is up to the judge to determine whether or not a property settlement is fair and to issue a final order.
Spouses who establish their businesses before they get married might not need to worry as much about losing those businesses because at least a portion may be classified as separate property. This does not mean, however, that their businesses do not affect the division of assets and other matters that arise in a divorce. In the case of a complex divorce that involves a business, the spouses might feel more comfortable going through the process with the support of their own family law attorneys.