What rights will I have in my business if my wife divorces me? 10 Answers as of February 24, 2011

I have business in my wife’s name but I gave her money to start the business. We also file taxes together. But if my wife divorces me, what will be my rights in the business?

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Diana K. Zilko, Attorney at Law
Diana K. Zilko, Attorney at Law | Diana K. Zilko
That will have to be determined during the divorce. Sometimes, ex spouses both have an interest in a business, and other times, one buys the other out, or assumes control and ownership along with all of the liability.
Answer Applies to: California
Replied: 2/24/2011
Warner Center Law Offices of Donald F. Conviser
Warner Center Law Offices of Donald F. Conviser | Donald F. Conviser
If the business was started during the marriage, it will likely be treated as a community business by the divorce court, unless you entered into a separate property agreement with her whereby you and she agreed that the business is her separate property - but in that case, you may be entitled to reimbursement of your share of the community property investment into that business, or if the funds used to start the business were your separate property funds (i.e., funds that you had before the marriage or that you received by way of inheritance, trust distribution or gift), you may be entitled to reimbursement to the extent that you can trace those funds to a separate property source.

If the business is treated as a community business, it should be valued by an expert forensic accountant, to determine its cash flow (for support purposes),your community share in the business, and to trace community and/or separate property contributions made to the acquisition of that business.

Given the issues involved in your divorce and their complexity, you should retain an experienced Family Law Attorney to represent you in the divorce.
Answer Applies to: California
Replied: 2/23/2011
Law Office of Curry & Westgate
Law Office of Curry & Westgate | Patrick Curry
The business is community property and you are entitled to one half.
Answer Applies to: California
Replied: 2/23/2011
Bartholomew & Wasznicky LLP
Bartholomew & Wasznicky LLP | Hal D. Bartholomew
All property acquired during a marriage (including a business) is presumed to be community property. The business needs to be valued. Once the value is determined, then a division of the community property occurs. Normally, the main operator of the business continues with the business but needs to either buy the other 1/2 or the value is offset in the division of the community property. Basically, the business belongs to both of you, even though it is only in one name. Please see a family law attorney for more specific information.
Answer Applies to: California
Replied: 2/23/2011
Michael Apicella
Michael Apicella | Apicella Law and Mediation
More facts are needed to properly answer this question. It would be best to simply call an experienced family law lawyer near you to discuss this issue. Make sure the lawyer has experience litigating division of a husband/wife business. This can be a complex area of law where there is no substitute for actual experience handling such matter. Good luck.
Answer Applies to: California
Replied: 2/23/2011
    Goldberg Jones
    Goldberg Jones | Zephyr Hill
    If the business was started during your marriage it is a community asset that must be divided equally. If she keeps the business than she must buy you out at the family law value of said business. These are complicated situations and you will want to get a good attorney on your side in advance of trouble. Make sure to plan this out as best you can.
    Answer Applies to: California
    Replied: 2/23/2011
    Law Office of Joseph A. Katz
    Law Office of Joseph A. Katz | Joseph A. Katz
    You may have a tough time ahead of you, in terms of protracted litigation. Do you and your wife agree regarding your respective interests in the company? Are you seeking reimbursement for your startup capital? The business is community property, or at least quasi-community property. Who operates the business? Your wife? You should settle the division of assets through a stipulation. Will she buy you out, or you buy her out? It usually does not work out well when you try to split profits after divorce. It is better to get your assets now, or sell off the company, if there is equity. You should seek a free consultation from an experienced Family Law Attorney.
    Answer Applies to: California
    Replied: 2/23/2011
    Law Office of L. Paul Zahn
    Law Office of L. Paul Zahn | Paul Zahn
    If the business was established during the marriage, it is a community property asset and is subject to equal division. Assuming that you do not wish to work at the business going forward (or are otherwise unable to do so) this will mean your interest in the business will need to be bought out. The services of an experienced attorney can ensure you receive what you are entitled to. Please contact me today for a free consultation.
    Answer Applies to: California
    Replied: 2/23/2011
    Diefer Law Group, P.C.
    Diefer Law Group, P.C. | Abel Fernandez
    The general response is that anything acquired during marriage is a community asset.
    Answer Applies to: California
    Replied: 2/23/2011
    Edwin Fahlen Attorney at Law
    Edwin Fahlen Attorney at Law | Edwin Fahlen
    If the business was started during the marriage the business is Community Property unless there is a signed agreement to the contrary expressly changing the character of the business from Community Property to Separate Property. Otherwise it does not matter if the business is in only one spouses name, it is still Community Property. There can be legal argument about the value of the business with certain credits and offsets, but this is a very complex area of law, and not conducive to explain here. More information can be obtained by contacting the attorney and discussing your particular facts.
    Answer Applies to: California
    Replied: 2/23/2011
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