Dividing a Business in a Divorce

December 22, 2019August 12, 2020
by Angie

When you’re a business owner going through a split, you need to know about dividing a business in a divorce. Do you have to give your spouse half of the company, will you have to sell it, or can you “buy out” your soon-to-be ex?

Dividing a business during a divorce can be a big challenge – and that’s why it’s so important that you work with a Stockton divorce attorney who understands what you’re going through and who can connect you to the experts you need to work with.

Dividing a Business in a Divorce: The Basics

During your divorce, you’ll make a lot of important decisions. You’ll have to think about child custody, spousal support, and how you’ll divide your regular assets and debts – and if you’re a business owner, you’ll have to consider what happens next in that area, as well.

Typically, you have three options:

One of you keeps the business
Both of you keep the business
You sell the business

Before you can start considering any of those options, you have to find out exactly how much your business is worth. A business valuation is an in-depth look at exactly how much the business is worth, and typically, it requires a professional assessment. So many factors can impact the value of a company, including its financial history, projected future revenues and expenses – so in the vast majority of cases, a professional valuation is necessary.

Here’s a closer look at each option you may have if you’re dividing a business in a divorce.

#1. One of you keeps the business

It’s fairly common for one spouse to keep the business. This works when one spouse is willing to “buy out” the other spouse’s interest in the company. The buyout is based on the business’s appraised value, which many people consider the most tax-efficient method of dividing some companies. In many cases, the buyout is considered a transfer of property incident to divorce, so it’s not like an ordinary buyout.

If one spouse doesn’t have the money to buy the other spouse’s interest in the company, the court may allow you to work out an arrangement for payment over time. Your attorney can give you case-specific guidance if this is a route you’re interested in taking.

#2. Both of you keep the business

Sometimes both spouses hold on to their own shares in a business. While it’s straightforward and simple to do this, it might not always be the best solution. For example, when two soon-to-be ex-spouses cannot get along well enough to manage the company effectively, it can do more harm than good. However, if you and your ex can keep things amicable – and effectively work together to keep the business going – it might be an option for you.

Related: Community property in California

#3. You sell the business

In some cases, both spouses decide to sell the entire business. When that happens, they typically split the proceeds. However, it can take time to sell a business – and it can drag out your divorce, too. If you choose to sell your business during your divorce, you’ll have to decide who’s in charge until it sells or if you can work together to manage it.

Unfortunately, there’s no one-size-fits-all approach to dividing a business in a divorce. You and your attorney – and your soon-to-be ex-spouse – will have to work together to figure out which option is right for you. Ultimately, what you decide to do will have an impact on your divorce and on your future after the divorce.

Do You Need Legal Advice on Dividing a Business in a Divorce?

If you and your spouse are splitting up – or if you’re simply considering divorce and would like to learn about what might happen in your case – we may be able to help you. Call us at (209) 546-6870 or get in touch with a Stockton divorce attorney online to schedule a consultation.

Divorce

LGBTQ Divorce: 5 Things You Need to Know

June 7, 2019August 13, 2020
by Angie

If you’re like many people, there’s a lot you don’t know about LGBTQ divorce. Is it the same as every other divorce, or are there nuances that make it different (or that would make your case harder)?

These are five things you need to know about LGBTQ divorce – but if you have more questions, or if you need to file, call us right away at 209-546-6870 to schedule a consultation with an experienced LGBTQ divorce attorney in Stockton.

LGBTQ Divorce: 5 Things You Need to Know

In the majority of cases, LGBTQ divorce is just like every other divorce. However, there are some things that can make it more complicated (again, like all other divorces), including issues like alimony, child custody, and the division of business assets. Here are five things you need to know about LGBTQ divorce:

If you have children, you’ll have to work out a custody arrangement.
One of you may be entitled to alimony.
You may need to hire a professional to value your business.
If you lived together long before you were married, it could affect what you’re entitled to.
If your child was born before you were legally married, you may encounter complications.

Let’s take a deeper look at each of these.

LGBTQ Divorce Fact #1: If you have children, you’ll have to work out a custody arrangement.

Like all parents, if you have children, you’ll have to work with your soon-to-be ex-spouse to work out a custody arrangement. In the vast majority of cases where parents work out an arrangement that’s fair to the kids, the courts will sign off on it.

LGBTQ Divorce Fact #2: One of you may be entitled to alimony.

Depending on the circumstances of your marriage, one of you may be entitled to receive spousal support. You or your spouse can ask the court to grant it, and it’s up to the judge in your case to decide – unless, of course, you work together to reach a fair amount that the judge agrees to. The courts decide how much spousal support changes hands based on several factors, including:

The supported spouse’s marketable skills, and whether there’s a job market for those skills
How long the supported spouse was unemployed in order to contribute to domestic duties in the marriage
How much the supported spouse contributed to the other spouse’s education, training, licensing or career advancement
Each spouse’s age and health
Documented history of domestic violence by either spouse
Tax consequences for both spouses
Other factors the court deems necessary

LGBTQ Divorce Fact #3: You may need to hire a professional to value your business.

If you own a business that you need to divide during your divorce, it’s probably in your best interest to work with a professional to value it accurately. The form of the business you own – whether it’s a sole proprietorship, partnership, or corporation – has an effect on how it’s divided. For example, a sole proprietorship is divisible when you divorce, but other types of companies are more nuanced and probably require professional help.

LGBTQ Divorce Fact #4: If you lived together long before you were married, it could affect what you’re entitled to.

Traditionally, California courts have ruled that spousal support lasts for about half the length of a marriage if the marriage lasted less than 10 years. Unfortunately, though, current California residents who were together for a long time but couldn’t marry in their own state – like Texas, for example, until 2015 – have been married for far less than 10 years but together for longer.

In cases like these, it’s often best to work with a divorce mediator who can help you.

Related: What is divorce mediation?

LGBTQ Divorce Fact #5: If your child was born before you were legally married, you may encounter complications.

If you have a child who was born before you were legally married to your spouse, you probably need to establish parentage (if you haven’t already done so). This is necessary if you’re going to work out custody and child support, and it’s something you’ll have to talk to your Stockton divorce attorney about if you’re a divorcing parent – particularly if you’re not biologically related to your child.

Do You Need to Talk to a Stockton Divorce Lawyer About LGBTQ Divorce?

When you and your spouse are splitting up, it’s rough – but we can help you through the legal side of it. Call us right away at 209-546-6870 to schedule a consultation with an attorney, whether you’re just thinking about divorce, you’re completely ready to file, or your spouse has already filed. We may be able to help you get the best possible outcome.

Tag: <span>Business Valuation</span>

Dividing a Business in a Divorce

Dividing a Business in a Divorce: The Basics

#1. One of you keeps the business

#2. Both of you keep the business

#3. You sell the business

Do You Need Legal Advice on Dividing a Business in a Divorce?

LGBTQ Divorce: 5 Things You Need to Know

LGBTQ Divorce: 5 Things You Need to Know

LGBTQ Divorce Fact #1: If you have children, you’ll have to work out a custody arrangement.

LGBTQ Divorce Fact #2: One of you may be entitled to alimony.

LGBTQ Divorce Fact #3: You may need to hire a professional to value your business.

LGBTQ Divorce Fact #4: If you lived together long before you were married, it could affect what you’re entitled to.

LGBTQ Divorce Fact #5: If your child was born before you were legally married, you may encounter complications.

Do You Need to Talk to a Stockton Divorce Lawyer About LGBTQ Divorce?