Dividing property in a divorce is often a complex and emotional process. When a family-owned business is involved, the process can become even more difficult to navigate. You may find yourself facing a number of difficult questions: Should the business close and the assets be split among parties? If not, who should keep the business? And how should you calculate the value of the business?
The family law attorneys at Soheila Azizi & Associates, P.C., are experienced advocates for clients facing division of complex assets, such as family-owned businesses. Family law issues are about much more than the law—it’s about relationships. And Soheila Azizi and Associates, P.C. is proud to serve the Inland Empire with compassion and integrity. Our experienced family law attorneys are prepared to help you through this difficult and emotional time, building a strong foundation for the future.
Soheila Azizi and Associates, P.C. is proud to be your law firm for life. Call (909) 484-9992 or contact us online to schedule a consultation with one of our experienced legal representatives today.
California is a “community property state,” meaning that a marriage or partnership makes a couple one legal “community.” That being said, any property or debt acquired during the marriage or partnership is shared between the two parties. Under California law, property can include homes, cars, furniture, clothing, bank accounts, security deposits on apartments, pension plans, patents, stocks, and more.
A family-owned business developed during your marriage is considered community property and, like any other community property, the value must be split between parties.
However, it is important to note that not all pieces of community property must be divided equally. Rather, when everything is said and done, the net value of each party’s property should be roughly equal. For example, say you have a house, a car, and $40,000 of credit card debt to split between the two of you. In order to strike a balance, one spouse could take the house and the credit card debt (or at least a much larger share of it), and the other could take the car. Similarly, if one party wants to keep the family-owned business in the divorce, then he or she will have to give up certain big-ticket items to equal out the property division (depending, of course, on the value of the business and its success).
To divide complex community property correctly, each asset must have a monetary value. A family-owned business is often unique and contains intangible assets, including your business’ reputation and goodwill. Our law firm works with business valuation experts, such as forensic accountants, to determine the value of your business. (In addition, if one spouse fails to disclose their business assets, we will work to obtain a court order requiring full disclosure of all assets.) We then use that value to negotiate for your interests in divorce mediation, negotiations, and court.
Your business does not need to be dissolved to allow the assets to be divided. For example, one spouse may take all business assets, but let the other spouse take other community property—or financial assets—equal to their share of the business’ value. In this way, you can achieve the “equal net value” that California law requires.
However, if you and your spouse decide that your family-owned business cannot continue after your divorce, you may need the assistance of an attorney to help dissolve the business. At Soheila Azizi & Associates, P.C., we explain your options thoroughly so that you can make informed decisions when working through the dissolution of your business and the division of assets.
It is important to note that the best solution for your case will depend on the nature of the business, its success, and the relationship between the two parties. For example, say your family-owned business is an Italian restaurant with 10 locations throughout the state. In this case, you could try to work out an arrangement in which each spouse takes five locations and operates them independently. However, this will depend on your relationship with each other and ability to work together in a business setting. Also, it will still require some work in business valuation, as not all locations will have the exact same profit levels. If working together is not possible, it may be best to give all 10 locations to one spouse in exchange for some other piece of property or dissolve the business altogether.
The complexity of dividing family-owned businesses makes it extremely important to consult an attorney with experience in different legal areas. Having an attorney on your side with a background in mediation and alternative dispute resolution will make it easier to come up with creative solutions and work through difficult problems.
Soheila Azizi and Associates, P.C. is proud to be your law firm for life.
Our experienced family law attorneys are prepared to handle your case with respect, compassion, and dedication. With our extensive experience in trial litigation, mediation, and arbitration, you can rest assured that we will find the best solution for your unique case. We are proud to represent your family’s best interests throughout the phases and changes in your lives. Our family law attorneys are committed to open, honest communication and keeping you informed throughout the legal process.
If you would like to talk to an experienced attorney about division of complex property, contact the Law Offices of Soheila Azizi and Associates, P.C. Our skilled attorneys specialize in coming up with creative solutions for different family situations, allowing you to put your family’s interests first. Call (909) 484-9992 or contact us online to schedule your initial consultation today.
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