How is a family owned business divided in a San Diego divorce in Carlsbad? If the business was in the family and the spouse owned their position in the company prior to the marriage it may be at least partially considered to be separate property. There will be a lot of questions regarding the use of marital funds to support the business and/or work done by the non-ownership spouse on behalf of the company which was not paid at market rate.
What happens if the business was purchased during the course of the marriage, and the spouses are equal partners and both work in the business.
The first step is to establish the valuation of the business itself. The community property interest of each spouse in the business would be half of the ultimate valuation of the business. This would present four basic options:
1. Sell the business and divide the proceeds equally
2. Continue to work together as professionals, and keep the business
3. One spouse buys the other out of the business. This is usually accomplished out of the acquiring spouse’s own share of the community property and perhaps a note for any remaining balance secured by the business.
4. Both spouses keep their ownership share, but one is replaced by another employee.
When the family business involves members of your extended family, the basic process is to establish the valuation of the business and the value of each spouse’s share as part of the division of community property. In these cases the spouse who is “in the family” usually buys out the community property interest of the other spouse.
The answer to “How is a family owned business divided in a San Diego divorce” is one of the most financially complex and legally challenging issues many divorcing couples will face. If you or your spouse own an interest in a business or professional practice you will need the experienced and proven Certified Family Law Specialists at Burke & Domercq to manage your case and protect your interests.
Burke & Domercq has represented clients before San Diego family law courts for decades. This experience informs the sound advice and counsel our Certified Family Law Specialists provide to our clients. We have managed numerous cases involving a closely held business or professional practice and are prepared to assist with your case.
How is a family owned business divided in a San Diego divorce in Carlsbad and how can you make sure valuation is fair and accurate? Protect your own interests and contact us or call 760-389-3927 to schedule an appointment for a remote or socially distanced consultation with one of our experienced Certified Family Law Specialists.