With divorce remaining commonplace throughout the country, the concept of how assets are divided between divorced partners continues to be an important topic. Most people are aware of the process of splitting up property ownership, existing financial assets and more when divorce happens, but businesses can also be impacted by the dissolution of a marriage. Divorcees in California need to know how their business may be affected in the event their marriage ends.
There is a large misconception that if a divorce is uncontested, there are no financial ramifications. That is simply not the case. Marital property is defined as “all income and assets acquired by either partner during the marriage.” This means that a business that was launched during the marriage or assets that came into an existing marriage can be considered marital property in the event of a divorce.
Depending on the court-ordered divorce agreement, the day-to-day operations of a business can also be impacted by a divorce. If both parties in the divorce receive a substantial amount of stock in the company during the divorce, they may be forced to work together going forward. This means they may need to clearly define roles about who is responsible for what to ensure the future health of the business.
An individual who finds themselves facing a divorce when they are the owner of a business may want to work with an attorney who is experienced in similar cases. While the former spouse may be entitled to a certain percentage of the business, a well-versed divorce attorney may be able to help their client maintain control of the company that they have worked hard to create. An attorney may work as a negotiator to ensure that their client can argue for their status as the leader of their business.