Divorce for Business Owners 101: Everything You Need to Know

divorce for business owners

Dividing a business in a divorce is a complicated task; there are many things you and your spouse should consider. California is a community property state, which means that when a couple divorces, all community assets will be divided in half. A business is an asset so this leads to the question of whether that asset is a community asset or a separate one.

My Business Started Before Marriage


If you started your business before you tied the knot, you might think it would be separate property but that often is not the case.   The community most likely has earned an interest in the business by virtue of your marriage. How much depends on a few things, such as how successful was the business before the marriage and how successful is it now? Has it become more valuable or less? Assuming its value has changed, did your spouse contribute at all? How much time or effort did your spouse contribute? Was the business started with separate property funds? These questions are just the tip of the iceberg. There are many nuances and questions to consider that only a Del Mar divorce lawyer is qualified to guide you through.

 how are business assets divided in divorceWhat About Business Debt?

If the business ends up divided between both spouses, any debt the company has will also be shared, making both parties responsible.

When Dividing a Business, Can You Still Get Spousal Support

The answer could be yes. The value of a business that began during the marriage is an asset to be divided 50/50.   However, the income that one party earns from the business may also be accessed to pay both child and spousal support. 

Who Keeps the Business?

Assuming the business is considered community property, who should get to keep the business? There are different ways you can go about this. One spouse can buy out the other, or the company could be sold, with all associated profits divided equally. You could agree to co-ownership and continue to run it as business partners would. If these three options are not on the table, then it will depend on the court. If you run a business that relies on your expertise and level of education, such as therapists or doctors, then the company is likely to end up being awarded to you since it cannot continue without you. However, if the business has a market value, you will need to pay your spouse one half of the community interest in the business. How are business assets divided in a divorce? Well, ultimately, that will depend on the judge or both parties if a settlement is an option.

Divorce for Business OwnersChoose Neumann Family Law, APC for Your Premier Del Mar Divorce Lawyer

A divorce in California can be a very messy affair; the higher the value of the couple’s assets, the more complicated things usually are. For a California business owner, divorce is especially tricky since dividing up a business is perhaps one of the more difficult tasks, as there are many details to consider. Attempting to do this without proper legal representation is simply far too risky. With over 75 years of collective experience, the award-winning attorneys at Neumann Family Law, APC are here to help you protect your business and your assets. Call us today at (619) 282-1107 for a complimentary consultation with a divorce lawyer in Del Mar.

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