Orange County Business Owners Divorce Attorney

Orange County Business Owners Divorce Attorney

In divorce, property division is subject to the state of California’s community property laws. Any property acquired as part of the marriage is generally shared and equally divided. However, determining whether a business is community or separate property can be confusing and contingent on many considerations. An Orange County business owners divorce attorney can ensure that you understand the review of your business and how to maneuver this legal process.

Why Choose Moranda Law Firm, APC?

It’s important to hire the right lawyer when you are going through a divorce. At Moranda Law Firm, APC, we are experienced and trained to represent you and your most valuable assets. We tailor legal solutions to your specific circumstances so that your business gets properly reviewed and your interests are effectively represented. Our team is knowledgeable about California’s community property laws and has worked extensively on business valuations and sales, and we are here to help you every step of the way.

Categorizing the Business

What makes your company separate or collective property largely depends on its history. You are far more likely to argue for separate property if your business was already thriving before you got married. This is not a guarantee of how your business will be categorized by the courts. These distinctions are sometimes blurred by several factors, including sharing of funds or spousal involvement in the company.

If your business originated within the marriage or has grown significantly under your spouse’s financial or operational guidance, then it could be considered community property. If your spouse had direct involvement in the business, such as contributing to daily operations, being on payroll, investing money, or participating in operational or shareholder meetings, the spouse could claim a personal stake in the business.

Even if one spouse was not directly involved in the business but helped indirectly, such as putting their own careers on hold to manage the home or raise children so the other spouse can focus on the business, this can be considered as well. An experienced divorce attorney can help you decipher the details of your business assets.

Valuing the Business

A complete valuation of your business is required before any division. It involves analyzing the value of the business as it stands in terms of both material and immaterial assets. However, it should be noted that a judge may regard this valuation as a guide, not a fixed figure.

For example, if a buyout was announced, anticipated future revenues and growth could be included in the final settlement. This may give your spouse a share of the future profit that they would have had.

How to Divide the Business

During a divorce, there are several options for dividing the business. The option that is chosen is usually to fit the specific goals and circumstances of the divorce and business. The relationship the two ex-spouses have with each other will also factor into these options. Some options include:

• Co-ownership. Co-ownership is not as common when a divorce occurs, but it does happen. This can be a viable option if the spouses are amicable with each other and work well together in a business relationship. However, this option will require clear communication and defined legal agreements.
• Buyout. You may consider a buyout where one partner makes a payment to the other to give up their share of the company. This keeps the business in one person’s possession. The buyout price is typically based on the company’s valuation and negotiated as part of the settlement process.
• Selling the business. If neither party wants to keep the business, or if it’s financially unsustainable to continue, then the most appropriate course of action could be to sell the business. The sale proceeds can be split up as part of the divorce. This method guarantees a clear separation, leaving both parties free to move on without business relations.

How a Lawyer Can Help

A skilled attorney can help you navigate the complexities of division in a business during a divorce. From properly defining the business as separate or community property to guaranteeing a fair valuation, an experienced attorney can assist you in all the steps involved. They can negotiate advantageous terms, protect your rights, and advise you about options like buyouts or co-ownership.

FAQs

Is My Wife Entitled to Half My Business if We Divorce in California?

Since California is a community property state, any property gained during the marriage is generally divided equally. If your business was established or expanded substantially during the marriage, your spouse could be owed a share of its market value. The time the business started and whether your spouse is involved might influence the splitting. An experienced attorney can help determine how much, if any, of the business your spouse may have a claim on.

What Happens When You Own a Business and Get Divorced?

If you own a business and get divorced in Orange County, California, your business will be evaluated as either community property or separate property. The business will be fully valued, and any potential divisions, such as co-ownership, buyout, or sale, will be discussed. The idea is to divide the business or its assets as fairly as possible, considering the situations of both spouses.

How Is a Business Valued During a Divorce?

Business valuations in a divorce involve examining your business based on the market value, including its real estate and intellectual property. Income, expenses, assets, liabilities, and potential income are considered. These factors all play a role in determining the true value of a business. An experienced attorney can coordinate with finance professionals to get a reliable estimate.

What Is the Difference Between Community and Separate Property in a Divorce?

Community property includes property acquired in the marriage, such as joint bank accounts, businesses, or real estate bought together, and is typically distributed evenly. Separate property includes property acquired before the marriage or through inheritance or gifts, such as money or family heirlooms. It is important to categorize your business correctly during divorce proceedings

Contact Moranda Law Firm, APC

Going through a divorce can be difficult. It can be increasingly stressful if there are important additional factors to consider, including the division of a business. You do not have to figure this out on your own. Contact Moranda Law Firm, APC and we can help you through this process.