Business Owners Getting Divorced in California: Protecting Your Company & Assets
Business Owners Getting Divorced in California: Protecting Your Company & Assets
Divorce can be challenging for anyone - but for business owners, it often comes with higher stakes. In California, where community property laws determine how marital assets are divided, your company could become part of the negotiation. Protecting your business during divorce requires both legal insight and proactive planning.
Here’s what every California business owner should know.
1. Understanding Community Property and Business Ownership
California is a community property state, which means that any assets (or debts) acquired during marriage are generally considered jointly owned.
If your business was founded, acquired, or significantly expanded during the marriage, your spouse may be entitled to a portion of its value.
Even if you owned the business before marriage, increased value, reinvested profits, or joint efforts during the marriage could make part of it community property.
2. Determining Business Valuation During Divorce
Business valuation is one of the most complex aspects of divorce. Courts and attorneys rely on financial experts to assess:
The company’s current market value
Revenue trends and projected growth
Personal goodwill versus business goodwill
Ownership interest of each spouse
Having accurate and defensible documentation helps ensure your valuation reflects the true worth of your business - not an inflated or undervalued estimate.
3. Legal Tools to Protect Your Company
If you’re married and run a business, several legal strategies can safeguard your company:
Prenuptial or Postnuptial Agreements: These outline how business interests will be divided if divorce occurs.
Buy-Sell Agreements: Establish how ownership shares will be handled in case of divorce or departure.
Proper Recordkeeping: Keeping personal and business finances separate demonstrates that the company is not a community asset.
Working with a business divorce lawyer early can prevent disputes later.
4. Navigating Division of Business Assets
In some cases, spouses may agree to a buyout, where one retains the company while compensating the other with equal-value assets.
In others, couples may opt to co-own the business post-divorce - though this requires mutual trust and cooperation.
The best approach depends on your relationship, business structure, and long-term goals.
5. Work with Legal Experts Who Understand Both Family and Business Law
Divorces involving businesses require a unique combination of family law and business law experience. The Wright Legal Team, APC specializes in helping California business owners navigate these complex cases while protecting what they’ve worked hard to build.
Our attorneys will assess your business valuation, ensure proper documentation, and fight to protect your ownership rights under California law.
Secure Your Business Before or During Divorce
Whether you’re preparing for marriage, considering divorce, or currently in the process, taking action early can make a major difference.
👉 Schedule a confidential consultation with The Wright Legal Team, APC to discuss how to safeguard your company and assets during a California divorce.