Many people who live in Oakland or other communities in the Bay Area own a family business or have a significant interest in one of them.
Often, these family businesses are the source of both a person’s wealth and their regular income, as they devote much time to the business. Those involved in these businesses may also have a strong emotional connection to them.
These are some of the reasons why a divorce can be a traumatic experience for owners of small businesses, particularly if the business has been in the family for several generations.
Like other property, business interests are subject to California’s community property laws. This means that if the business was acquired during the marriage, a spouse can claim half the value of the owner’s business investment.
This is so even if the owner alone devoted time and energy to the business and was the only person who legally held the right to the business’s capital.
A person who owns a business and is divorcing should understand all legal options
Someone who has an interest in a family business will want to explore all available legal options. For example, if both spouses are involved in the business and want to keep running it together, they may wish to keep the status quo even if they are choosing to live separate lives outside of work.
Often, the business owner is going to have to negotiate some sort of buyout of the other spouse. How much the business owner owes the spouse will depend on the value of the business and other circumstances.
An owner may elect to give up other property to the spouse or may choose to come up with cash. In some cases, it may make sense for a person to sell all or part of their interest in the family business.