California Divorce Attorney Giving You the Representation You Need to Protect Your Business Assets During a Divorce

Be it a small, locally owned company or a national corporation, operating your own business is many Americans’ dream. It requires a great deal of time, dedication, and hard work to build a company from the ground up.

Similarly, marriage is also many Americans’ greatest dream. Several people begin thinking of their wedding day when they are still in high school or college. Finding “the one” and settling down to a happily ever after is the goal many people work for.

Sometimes, career and family ambitions can clash. If you are a business owner in the state of California going through a divorce, you may find your company’s assets threatened. This is even if your spouse had little or even nothing to do with the growth and success of the business.

What Are the Divorce Laws in Orange County?

California is a Community Property State. This means anything earned, acquired, or purchased during the marriage legally becomes the property of both spouses. This is regardless of which spouse actually obtained the property in question. Under California law, property covers a wide range. It can include but is not necessarily limited to:

  • Money
  • Houses
  • Cars
  • Other Real Estate
  • Debt Acquired During the Marriage
  • Business Assets

In the event of a divorce, property must be divided equally between the spouses. Prior to a judge becoming involved, the couple will be given the opportunity to come to a resolution on their own. If the spouses are divorcing amicably, this process can be relatively easy. This is especially true if lawyers are involved. However, if the spouses are not divorcing amicably, the court will have to become involved. This means the couple will have to appear before a judge. The judge will then determine how the assets are divided.

How Does Divorce Impact Businesses in Orange County?

A business is considered another type of asset in a divorce. This includes any assets related to the business itself. These assets can include:

  • Trademarks
  • Patents
  • Copyrights
  • Business Savings
  • Stocks/Holdings in the Business

Under community property, a spouse does not have to have been involved with the operation of the business to acquire assets related to it. A spouse could have provided emotional or moral support, been actively involved in the operation of a business, or not involved at all. Under community property laws, the business becomes an asset to be divided between the spouses. The value of the business becomes what’s important.

This does not mean one spouse or the other will necessarily receive total control of the business. It could mean a situation where each spouse receives a portion of interest in the business. It could also mean one spouse receives control of copyrights or trademarks associated with the business. If the spouses cannot reach a resolution on their own, it will be up to the judge to decide.

How Can I Protect My Business During a Divorce in California?

There are certain legal steps that can be taken to keep your business from being considered community property. There is nothing wrong with wanting to protect a company you started. Any steps you take to protect it shouldn’t be seen as a lack of trust in your spouse. It should rather be seen as a type of insurance. No one buys car insurance expecting or wanting to be involved in an accident. Similarly, steps taken to secure your business should be seen as insurance in the event of a divorce. You don’t want the marriage to end, but are insuring your business if it does. These steps can include:

  • A Prenuptial Agreement
  • An Asset Protection Trust
  • A Buy-Sell Agreement
  • A Separate Business Account

A prenuptial agreement is the easiest way to protect your business. This is a contract signed prior to marriage that provides for exceptions to community property laws. It separates out certain money and property that will be exempt in the event of a divorce. A prenuptial agreement can have a stipulation in it setting aside a business and any associated assets in the event of a divorce.

An asset protection trust is a special type of trust that protects your business assets from creditors in the event of a bankruptcy. It can also be used to protect your assets in the event you or your business are sued. In some instances, it can also potentially be used to protect those same assets in the event of a divorce.

A Buy-Sell Agreement is a contract that stipulates how ownership of a company will be handled in the event a controlling partner leaves the business. This same principle can be applied to a married couple in the event of the divorce. The agreement will treat the other spouse as a partner in the company. This can put a protection in place for you that allows you to “buy out” your spouse first before the court splits assets.

A separate business account differentiates your business earnings, assets, and holdings from money related to the marriage. In the event of a divorce, this can be used to establish what money is directly linked to the business and potentially ensure you receive most or all of it.

Above all, the best way to protect yourself is by consulting a divorce attorney. An experienced attorney will know the best ways to protect your particular business and assets in the event of a divorce.

What Should I Do if I’m a Business Owner Going Through a Divorce?

A divorce involving a business can be complicated. Even if you have taken steps to protect yourself, your spouse’s attorney may attempt to find loopholes. The steps you have taken also may not necessarily be enough to guard your business. This is why it’s important to have your own experienced divorce attorney.

If you or a loved one are a business owner considering or going through a divorce, don’t hesitate to contact The Law Office of Patrick O’Kennedy, located at 500 N State College Blvd Suite #1100, Orange, CA 92868, half-a-mile Southeast of Angel Stadium and half-a-mile North of UCI Medical Center. Patrick O’Kennedy has experience in helping business owners navigate divorces, including protecting their business and assets. He knows what methods are right for which businesses and business owners. He assesses each client and their business individually and helps tailor a plan for you to best ensure you keep the company you worked so hard to build.

Divorces can be difficult. Divorces involving businesses can be even tougher. Don’t allow someone else to take what you invested your time, effort, and hard work into. If you’re a business owner considering or going through a divorce, call the Law Office of Patrick O’Kennedy today at 714-701-6356 or email us for an in-depth, no obligation consultation.