Divorce in California: Business and Investments

Divorcing spouses in California must divide community property equitably. This often includes business and investment assets accrued during marriage. If you want to limit losses in divorce in California, here are key steps to take:

  1. Analyze Marital Property Status – Work with your lawyer to categorize assets as community property (shared) versus separate property (yours alone) based on strict tracing of funds and timing. Separate property is not divisible in divorce in California.
  2. Consider Asset Valuations – Valuing complex assets like businesses, partnerships, stock options, and venture capital investments involves forensic accounting and subjective projections. Work with experts to assess and argue business values reasonably in divorce in California.
  3. Discuss Asset Division – Don’t assume you must split everything 50/50. Based on asset type, tax consequences, time investments, and other factors – argue for an unequal division that favors retaining your business or investment interests when equitable.
  4. Put it in Writing – Requesting unequal property division favoring key business/investment assets should be formally made in writing for court consideration well before final decree in divorce in California.
  5. Change Ownership Structure – If permitted under law and current agreements, restructuring ownership in advance can help limit future losses. This may involve transferring portions of community property assets to separate property.
  6. Change Accounting Practices – Consulting with business accountants and tax experts can identify beneficial changes to help prevent commingling of separate and marital funds going forward, especially in divorce in California.
  7. Draft Ironclad Prenups – For married business owners in California, acting preventatively with detailed prenups outlining separate property and business valuation processes is key to protecting assets in divorce.

With proper planning and experienced legal counsel, California business and investment asset owners can often achieve optimal property division outcomes when facing divorce. Contact our attorneys today to protect your hard-earned business assets.

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