Protecting your business from divorce

California divorces are very tricky for business owners. It is a community property state, meaning that marital property is presumed to be divided in half. This can be true even when you owned the business before the marriage. Therefore, protecting your business from a divorce becomes a paramount concern.

A prenuptial agreement is the best means for protection

The best way to protect a business is through a prenuptial agreement. This is crucial when you own a business before the marriage. This document is a contract, and it would specify exactly what would happen to your business in the event of a divorce. It would require full disclosure of assets, and it would need to be fair to the other spouse. The prenuptial agreement means that you could keep your own business after you divorce. If you started the business after marriage or did not sign a prenuptial, you could consider a postnuptial agreement.

Community property makes it difficult to keep your assets separate

Outside that, it is very difficult to establish your business as separate property in California. If you are about to get divorced and are just considering it now, chances are that it is too late. This is something that you need to think about ahead of time when you are planning on getting married. In a divorce, you can expect your ex-spouse to want to be compensated for what they believe is their share of the business. This often becomes a major point of contention.