Divorce tends to impact every aspect of a person’s life, including their professional life. This is all the more true if you own a business in California. While the end of your marriage doesn’t have to mean the end of your company, there are some measures you’ll probably want to take so you can ensure that business isn’t disrupted in the process.
California is a community property state
Because California is one of the nine community property states in the U.S., your business gets split down the middle in the divorce proceedings. It works the same way as the 50/50 split that applies to the rest of your assets.
In the rest of the United States, it takes a court decision to determine whose marital property is whose. This is called equitable distribution and generally becomes a long and drawn-out process, especially if both parties cannot agree on how to divide the marital property fairly.
Be prepared to have a lot on your plate
There’s a good chance that you’ll find it harder to stay as focused as you usually are on the regular operations of your business while the divorce is in full swing. It’s helpful to plan for a limited amount of time and mental bandwidth while dealing with these proceedings.
If possible, you might want to reschedule any major business moves or meetings until you can finalize everything. This will hopefully allow you to give each matter your full attention and get better outcomes.
Watch out if you happen to be a significant stakeholder. If your ex-spouse winds up with a large amount of your stock once the settlement is over, there’s the chance that the company will suddenly have an extra partner. This situation could significantly harm your business. Additionally, remember that your interest will be diluted. This has the potential to change your status and power within the organization.
