Chico Property Division Attorney
Property Division for Couples that Own a Business
Divorce is a messy business in most cases and when both spouses are involved in a family business, the situation only complicates things. The division of property must include business ventures. All assets must be assigned a value. For large companies, public trade can dictate this. However, in most divorce cases, the business in question is a small family operation. Measuring the value of this type of asset can be more complicated. It is recommended that each spouse work with a chico divorce lawyer to ensure that an agreement is met.
Characterization, Valuation, and Division
In the state of California, there are three factors that are generally considered before dividing a piece of property as part of a divorce proceeding. This includes characterization, valuation, and division. Characterization is the determination of whether property is considered community property – owned by both parties – or separate property. In some cases, such as with inheritance, an asset may belong only to one person and is not considered when dividing property. Valuation involves assigning a number amount to each asset. Value may be straightforward on some items, but for business assets, appreciation and depreciation must be taken into account. The last element is division: dividing the property between the two parties.
Tangible and Intangible Assets
A business’s assets are a combination of tangible and intangible items. Tangible items are easier to define and include physical objects, such as cash, equipment, property, and machinery. Intangible assets may be harder to calculate. This can include proprietary information such as trademarks, patents, and copyrights. Skills and business contacts are also considered assets, as they can bring in more potential business. If certain elements of your business are works in progress, such as products that are still being developed, they must also be counted. For the intangible objects, assigning a value depends on several things. This includes determining their effect on future income. Whether a business was doing well or not can be an indicator, but each individual’s ability to profit from the business is significantly affected by the loss of the other partner. It can be helpful to compare similar business to measure potential market fluctuations. Consult a divorce lawyer in Chico for additional details.
Continuing Business Through Divorce
Whether or not your business continues to operate while divorce proceeding are held depends on the type of business, whether there are additional employees, and how involved each partner was in daily operations. Likewise, it is difficult to determine how a business might success following a division of assets. In many cases, the stress of this process can negatively impact a business and the best option is to liquidate assets.
Working with a Divorce Lawyer
A highly-skilled divorce lawyer can assist with every step of the divorce process, including the division of business assets. It is important that all appropriate documentation is maintained. This can include business records, taxes, and receipts. In some cases, a prenuptial agreement may dictate some of the details about a business. However, often the business was started after marriage and will not be addressed. If you are considering divorce or have begun proceedings, contact an attorney to understand how this can affect you.