I Owned a Business Before Marrying in North County – is this Separate Property?

Pierre Domercq Professional Practice & Business Ownership

What happens to a business in a North County Divorce? How is the business handled if one of the spouses owned it prior to the marriage? How is business ownership divided when the company started during the course of the marriage?
If a person owns the business prior to marriage, the business is considered the separate property of that spouse. However, there are issues regarding the appreciation of the value of the business during the course of the marriage, as well as complications when marital assets were used to support the business. “Commingling” of community funds with a business asset may distort the designation of the property as a “separate” asset.
If the business was started during the term of the marriage, it will almost always be considered community property, and the community’s interest in the business must be divided evenly.
This does not mean the business must be sold. The process of seeking an agreed upon (or Court ordered) valuation is the basis for determining the community’s interest in the company. What would the company be worth if it was offered for sale to a willing buyer? What is the annual gross revenue of the business? What is the impact of one or both of the former spouse’s Goodwill upon the future prospects for the company?
Business ownership in a North County or Carlsbad divorce is quite legally complex. The experienced divorce attorneys at Burke & Domercq have decades of expertise in these matters and protect the interests of our clients while ensuring that proper valuation is performed. We understand the importance of preserving existing business operations and profitability while working through the division of community property during a divorce.
If you or your former spouse own a business or professional practice you need an seaonsed divorce lawyer to protect your interests. We invite you to contact us or call 760-712-3471 to schedule an appointment with one of our lawyers.