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Practical Advice for Business Owners Going Through Divorce
Divorce can be a difficult process. You and your spouse need to make many important decisions about how you want to divide your property after your marriage ends. One of the most complex property division issues arises when one spouse owns a business.
Under California law, the business is still classified as community property. If you are the managing spouse, you have a fiduciary obligation to openly discuss and fully disclose business decisions to your spouse.
At the Orange County Law Offices of Dorie A. Rogers, we understand complex property division, including the division of family-owned businesses. We can utilize experts to help you determine the proper value of your business and help ensure you receive an equitable share.
When you divorce, it is your legal responsibility to disclose all the financial records pertaining to your business and your monthly controllable cash flow. As the company's owner, you benefited from certain business expense tax breaks during your marriage. When you get divorced, that money is generally considered income.
Attorney Dorie A. Rogers has nearly 30 years of experience helping business owners plan for divorce. She understands the importance of hiring a forensic accountant to evaluate your monthly controllable cash flow.
This specialist can also evaluate your financial records to find income. Understanding your true income is important not only for establishing the value of your business, but also for determining child support and spousal support (sometimes called alimony).
Picking a Date
The date of your separation and divorce are critical. The court typically values assets nearest the time of trial. Depending on the type of business, the court will recognize the date of your separation as the date of valuation for your business. This means our forensic accountant would use that date for their evaluation of your business. This difference could cost you financially.
If your business is a sole proprietor or there have been financial events beyond your control and management affecting the value, we can request a change in the valuation date from the court. A hearing would then be used to determine your actual date of separation. These hearings can be complicated because factual questions about your marital relationship and documentary evidence are used to determine when your relationship truly ended.
Calculating Good Will
When determining property division, the good will of your business may be monetarily valued. Basically, there are measures that place a value on your good will, or reputation. The law considers that as a sole proprietor, without your individual effort and personal reputation, your business may not have been successful.
California Family-Owned Business Lawyer
Our law firm has represented spouses seeking divorce from their business-owner spouses. We can help protect your legal right to a fair and equitable share of your spouse's property.
Having a lawyer on your side as soon as possible can help prevent or find hidden assets and obtain an accurate valuation of your spouse's business.
Call Us Today
For more information, or to schedule a consultation with a lawyer, please call us at 714-602-1492 orsend us an e-mail.