How is a Family Owned Business Divided in a North County Divorce?

Pierre Domercq Professional Practice & Business Ownership

How is a family owned business divided in a North County divorce? Let’s assume the business was purchased during the course of the marriage, and the spouses are equal partners and both work in the business.
The first step is to establish the valuation of the business itself. The community property interest of each spouse in the business would be half of the ultimate valuation of the business. This would present four basic options:
1. Sell the business and divide the proceeds equally
2. Continue to work together as professionals, and keep the business
3. One spouse buys the other out of the business. This is usually accomplished out of the acquiring spouse’s own share of the community property and perhaps a note for any remaining balance secured by the business.
4. Both spouses keep their ownership share, but one is replaced by another employee.
When the family business involves members of your extended family, the basic process is to establish the valuation of the business and the value of each spouse’s share as part of the division of community property. In these cases the spouse who is “in the family” usually buys out the community property interest of the other spouse.
The division of a family owned business in a Rancho Santa Fe, Encinitas, Oceanside or Carlsbad divorce is one of the most complex and challenging issues many divorcing couples will face. If you or your spouse own an interest in a business or professional practice you will need experienced and proven divorce and family law attorneys to manage your case and protect your interests.
The partners at Burke & Domercq have each represented clients before North County family law court for decades. This experience informs the sound advice and counsel we provide to our clients. We have managed numerous cases involving a closely held business or professional practice and are prepared to assist with your case.
We invite you to review the recommendations of our clients and the legal industry and contact Burke & Domercq or call 760-712-3741 to schedule an appointment.