California business owners face a unique set of challenges when they divorce. By law, a divorcing business owner may be required to hand over up to 50% of their interest in a business to their ex. Several factors determine the division of a business during divorce, even in a community property state like California. So to understand who gets what when it comes to business and divorce, here’s what you need to consider.
Is The Business Community or Separate Property?
In simple terms, the assets and property acquired during marriage are community property. While assets and property acquired before or after the marriage are separate property. So, when a spouse or couple acquires or starts a business during the marriage with community resources, courts will consider it to be community property and divide the asset equally between both ex-spouses.