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Divorce can be complex when a business is involved

Many business owners in California and across the nation may dedicate years into the process of cultivating a successful enterprise. When facing the end of a marriage, an owner may have concerns about how the process might affect the future of his or her company. While the process of property division will have an impact on a person's finances, it might not necessarily disrupt the longevity of a business, and one may be able to take measures to protect a company throughout divorce.

The impact a divorce may have on a business will depend on whether it is separate or marital property. Even in community property states, such as California, a business may retain its separate identity if it was started prior to marriage. However, if one's spouse takes an active role in the company after marriage, it may lose its separate identity. Alternatively, if the company goes up in value during marriage, the amount of the increase may also be deemed community property.

Even if a company is deemed marital property, an owner may have options available to help him or her retain control of a company. One could consider negotiating a buyout agreement during divorce proceedings, whether in a lump sum or through payments made to the other party over time. In addition, a person might be able to relinquish possession of other assets, such as a family home, in exchange for retaining sole ownership of a business.

Regardless of the type and amount of assets involved, divorce can be a stressful and daunting experience. However, when a business is involved, the process could become more complex, and an owner may find it beneficial to speak with a family law attorney for guidance on his or her available options. An attorney in California can address a client's concerns and provide advice on how to safeguard the future of his or her company.

Source: investopedia.com, "4 Ways to Reduce the Impact of Divorce on a Small Business", Shawn Leamon, Accessed on March 21, 2018

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