When you divorce in California, it impacts every area of your life. You have to deal with child custody and muddle through your assets. Splitting up your life can be very difficult. Things become even trickier if you own a business. The effect of the divorce on your business really depends on a few factors, but in many cases, you will end up having to split your business with your ex-spouse.
According to SMB CEO, a business is an asset. In a divorce, the court divides any marital assets. The court will typically divide anything you acquired during your marriage as a marital asset. With a business, it may still be a marital asset if it contributed to your household income. If your business increased in value or you expanded it during your marriage, it may also become a marital asset even if you started the business before you got married. It is complicated because the court considers everything about the business when making a determination.
You can protect your business in some ways, but you may not be able to protect it completely. It depends on the situation. If you have a prenuptial agreement that specifically mentions the business, this may protect it. You may also use a trust, or if you have partners, certain business agreements to protect it. However, if you did not plan ahead for a divorce, you could end up having to split the business with your spouse. This information is for education and is not legal advice.
