Are you the spouse of a business owner in a San Diego divorce? There are many things you need to know about how the community interest in the business must be managed as part of the property division in your divorce. This is why it is important to seek the proven, experienced advice of the Certified Family Law Specialists at Burke & Domercq.
There are far too many complex issues to address in a format such as this, but it is our hope to provide a bit of foundation as you approach the process of characterization, valuation and ultimately community property division of the business asset.
The first question as the spouse of a business owner in a San Diego divorce will be the determination of the “characterization” of the business asset as either the separate property of your spouse, community property or a blend of the two. Here in California, our state considers any business created during the course of a marriage to be community property. If the business was formed prior to the marriage and has been sustained without any marital funds or labor it may be characterized as “separate” property. If it was formed prior to the marriage but marital funds or labor have been commingled with the business or used to support it at least some portion will probably be characterized as partially a community asset, subject to division.
The next issue the spouse of a business owner in a San Diego will encounter is known as “valuation.” Valuation is a complex legal and financial process to establish the genuine value of the asset so that the community’s interest can be appropriately apportioned during property division. It is important to understand that many business owners in the past have attempted to hide assets or take steps to diminish the value of a business prior to divorce. You will need skilled, experienced attorneys and perhaps forensic accountants and a strong appraisal expert to reach an accurate valuation.
If the asset is characterized as community property, your spousal interest in half of the business will be another critical issue. As the spouse of a business owner in a San Diego divorce you may be awarded half of the valuation of the community’s interest in the business. In many cases, the provision of those funds “today” may threaten the viability of the business itself and could affect the business owner’s ability to continue with spousal support, child support and providing for any children you share. It may be prudent to seek an alternative to consider alternatives to taking that “half” today. You may offset this interest with other community property or assets, a secured interest in the business itself or a combination of these. There may also be substantial tax implications at stake. Draw on the experience and guidance of your attorney to work through these issues, protect your interests and ultimately accomplish your goals and objectives.
You will need a strong attorney to protect your interests during characterization and valuation. You will require sound counsel during property division negotiations. We invite you to review the strong recommendations of former clients and the legal industry, protect your interests and contact us or call 760-389-3927 to schedule an appointment for a safe, confidential and private consultation with one of our experienced and proven Certified Family Law Specialists.